Discovering a client's goals and objectives is one of the critical steps of the financial planning process. But how many advisors are raising the subject of charitable giving during that discovery process - or during any part of the planning engagement, for that matter?
The answer: not many, according to the
2010 Bank of America Merrill Lynch Study of High Net Worth Philanthropy (
click here to be taken to the study, available for free).
According to the study, taken from 800 survey respondents in HNW households, when it comes to the charitable discussion, the advisor initiates the discussion only 7.9% of the time, whereas the client initiates the discussion 92.1% of the time. This compares unfavorably with non-profit personnel, who initiate the discussion 15.7% of the time, or nearly twice as often as the advisor.
So it would seem that the conversation, when it takes place, is overwhelmingly initiated by the client. Which begs the question: what is holding advisors back from a proactive discussion about a client's philanthropic interests?
Having that discussion can be a true value-added to the relationship with the client, and can even unlock assets that the advisor isn't currently managing. If the advisor is engaged in holistic, comprehensive planning, then by definition philanthropy needs to be part of the conversation.