A U.S. Trust study found that people want their financial advisors to ask them about charitable giving. In fact, a third of clients surveyed think the topic of charitable giving should be raised in the very first meeting. Yet fewer than half feel their advisors are good at discussing personal or charitable goals with them.
Wondering how to start a conversation about charitable giving with your clients? Or looking to refresh your approach? As part of an ongoing series, we’re asking some of Central New York’s most experienced professional advisors how they “pop the question” about charitable giving to their clients. Hear from J. Daniel Pluff, Financial Advisor, on how he “pops the question.”
Why do you think it is important to bring up the topic of charitable giving?
As a financial advisor, charitable giving is an important topic to discuss with my clients to understand their overall financial objectives. A significant number of clients are actually thinking about this topic, however, they might not bring it up with me under the assumption that it’s a topic of discussion for their attorney or their accountant. Interestingly, once we start the conversation they begin to understand that they have myriad of giving options aside from cash such as appreciated securities, Individual Retirement Accounts (IRA) distributions, life insurance and other complex assets. Even if some clients haven’t formally thought about charitable giving, they become very interested when we start discussing the various flexible strategies to support the charities they care about.
How do you learn about your client’s charitable interests?
Quite frankly, I learn about my client’s charitable interests by just simply asking them. There may not always be a response to that question, but more often there is and it actually tends to spark a good discussion about charitable giving and their goals to give back to their community. There are also occasions when clients will mention an interest of theirs as a part of our planning conversation. I love coming back to what they shared with me and they in turn enjoy telling me about their interests outside of investing which includes supporting causes that they feel passionate about.
At what point(s) in your process do you bring up/revisit the topic of charitable giving?
For some clients, it may be the initial meeting when I bring up the topic of charitable giving and for others, I bring up the topic at future meetings when appropriate. I remember how one client of mine had received a financial settlement following a tragic accident where he had lost his family members. I directly asked him if he had any intention of honoring his lost loved ones from the accident which led to an emotional conversation. It took some time as one would expect from someone dealing with grief over losing family members, but he ended up creating a charitable fund at the Central New York Community Foundation to honor and preserve their legacy.
What questions or ideas about charitable giving do you find resonate the most with your clients?
Many clients are focused on control of assets after death and how to ensure their wishes are carried out. They are not just concerned about transfer of assets to beneficiaries but also to fulfill their charitable goals and preserve their legacy. When I ask what is important to them, they respond openly and are willing to share how they want to give back to their community. Also, for many, I sense the “feel good” factor when they realize how their charitable giving will have a positive impact to individuals or a nonprofit organization.
How has your approach changed over the years?
Sadly, in the earlier part of my career, charitable giving was simply not a topic I initiated with my clients. It somehow didn’t seem appropriate or perhaps I was just not comfortable bringing it up with my clients back then. Now, charitable giving is always a part of any planning discussion I have with my clients, especially with new clients. I believe many clients are simply waiting for advisors like me to ask them about their charitable interests and it also helps build trust with them.
Is there anything else you want to add about helping your clients with their charitable planning?
I have come to realize that charitable planning is an integral part of financial, investment and retirement planning. It is a part of the whole picture which must be analyzed as a portion of any plan we create for our clients as financial advisors. Charitable giving becomes one of the questions along with income needs, future expenses and it is incorporated in our financial plans. Asking about charitable giving as a part of financial planning not only benefits the clients who have a desire to take action to help the causes they care about, but also beneficial for advisors to build and strengthen their relationships with their clients.