Starting a conversation with your clients on charitable giving can be a challenge. Nonetheless, doing so will not only show your clients that they can rely on you to help with their future financial security, but also that you care about their personal goals, values and how they wish to make a difference.
But, not all advisors are comfortable getting the conversation started.
“It can be delicate. Financial advisors are reluctant to ask about charitable giving for fear of implying that clients are not giving enough, or that they haven’t really thought about philanthropic issues,” says Marvi Ricker, vice president and managing director, Philanthropic Services at BMO Private Banking.
“The best way to start is with a simple question, ‘Are there any charitable considerations you would like to discuss?' Just keep it open-ended, and then proceed based on how the person answers,” says Ricker.
According to a recent Ipsos Canada study
on the nature of the philanthropic conversation in Canada, advisors should feel confident initiating philanthropic discussions because virtually all of their clients are already givers. The research found that among the wealthy individuals who had conversations about philanthropy with their advisors, most found it useful and the vast majority were satisfied with the help they received regarding their charitable giving.
“When approached correctly, these conversations are useful, satisfying and help deepen the impact of philanthropic giving,” states John Hallward, chairman of the GIV3 Foundation. “The research shows that wealthy donors are open and interested in having the conversation with their advisor - and the sooner the better.”
While clients are open to talking about their charitable plans, it is still not that commonplace.
To get at a deeper, more emotional level of conversation advisors can try asking questions such as:
- Do you like to volunteer? Which volunteer experiences do you find the most rewarding?
- Which causes have you supported that gave you the greatest satisfaction?
- Are your partner, parents, children or grandchildren involved in your philanthropy?
- Do you have personal values that you feel you can express through charitable giving?
Another catalyst for starting the philanthropic conversation is when there is “money in motion”. Money in motion may be the direct result of an inheritance, sale of a business or a divorce settlement.
“If somebody has passed away, then there is an inheritance. Or if a public company is being sold and the client is a shareholder, this is an obvious time to open the conversation,” says Jo-Anne Ryan, vice president of philanthropic advisory services at TD Wealth and the executive director of the Private Giving Foundation.
If the money never does go “in motion” then there are other avenues to open a dialogue such as having discussions with clients about the type of legacy that they would like to leave.
“Our advisors who are most successful in incorporating philanthropy in their discussions are the ones who are involved themselves in charitable causes,” says Ryan. “They can talk about their own volunteer work and other charitable interests as a way of opening up to clients.”
But sometimes, the direct approach is the best.
“Another way is to just ask, ‘what do you plan to do with your money?’” suggests Ricker. “Beyond the basic needs that people have for housing, education of their children and general lifestyle, many of our clients will have excess money. Some have very definite plans as to how they want to spend it, others haven’t really given it much thought.”
However you choose to start the conversation, the evidence points to clear benefits of doing so. Ricker says that proactively engaging clients in a dialogue on charitable giving can pay dividends for your client relationship as you help them realize their philanthropic goals while also achieving their financial and personal objectives.
Look in the coming weeks for more 10 Ways articles:
What you need to know: the basics of making a charitable plan