Another way for financial advisors to engage clients: chat about charity

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As a financial advisor, your goal is to get to know your clients. But how deeply do you really understand them?

Do you know the market value of their RRSP, for instance, or have you gone further and talked about the exotic places they hope to visit upon retirement? Do you know the address of their cottage but didn’t realize it was lovingly built by hand by the client’s grandfather?

And when it comes to charitable giving, do you know the total value of their charitable contributions, or do you know why the Humane Society holds such an important place in their hearts?

For the first advisor, who has only skimmed the surface of the client’s life, the relationship is a potentially fleeting one. For the second advisor, who understands the client at a profoundly deeper level, the relationship is likely a lifelong one, because that advisor understands what matters most.

If you are the kind of advisor who strives to build deep, meaningful relationships with your clients, then a conversation about charitable giving is an effective way to learn more about what makes them tick. A client’s philanthropy provides a window into her values. The charities that your clients support are a reflection of the things that matter most to them.

There are many other reasons why you should engage your clients in a discussion about philanthropy. In addition to getting to know them better, it’s also an effective way to build bridges with their children, who they may want to involve in their giving. But the most important reason to have the conversation is that your clients want you to do so. Clients are looking to you to engage them in a meaningful discussion about philanthropy. And my guess is that you’d rather they had it with you than a new advisor.

For most advisors, the biggest issue isn’t whether they should engage their clients in a conversation about giving; it’s how. Here are some tips that will jumpstart your conversations.

Incorporate philanthropy into your regular meetings

Most advisors have regular (annual, quarterly) checkpoints with their clients. These meetings are a natural, seamless place to introduce philanthropy. As an advisor, your role is to help your clients meet all of their wealth management goals, including charitable giving. After you’ve finished talking to your client about their investments and retirement plans, take the opportunity to raise the subject of giving back.

Here are some conversation starters:

• “Tell me about the charities you support, and why.”
• “Are you interested in exploring new ways to support these charities?”
• “Are you aware that you can include charities in your will?”

The more you weave philanthropy into your regular check-ins, the more natural it will feel for you and your clients.

Philanthropy as a tax solution

Let’s be clear – people don’t give to charity solely to save on their taxes. But the tax benefits of charitable giving are simply too powerful to ignore. And if you’re more comfortable bringing up charitable giving in the context of a tax mitigation strategy, that’s fine. This conversation is especially powerful if your client is facing a significant tax bill as a result of a sale of an appreciated asset.

Charitable giving is the easiest and most effective way for Canadians to mitigate a tax problem, so if you’re not bringing it up as a potential solution, you are missing a significant planning opportunity.

Charitable giving is an integral part of holistic financial planning, and all advisors should treat it that way.

Here’s a conversation starter:

• “Would you like to explore charitable giving as a potential solution to your current tax exposure?”

For clients without children

Most people consider their legacy. For many, it is continued through the assets and values that they pass on to their children. For those without children, legacy may be about supporting the causes and charities that matter most to them.

Charitable giving is a way for clients to perpetuate their legacy. It may be a more palatable alternative to giving away assets to relatives to whom they do not have a close relationship. As an advisor, your job is to make them aware that charitable giving is an option.

Here are some conversation starters:

• “How do you want to be remembered?”
• “Are you aware that you can name a charity in a will, or as a beneficiary of an insurance policy?”

These approaches will allow you to introduce the topic of charitable giving to your clients. And in doing so, you will begin to engage them in ways you never thought possible. By helping your clients achieve their charitable and legacy objectives, you can develop a healthy lifelong relationship. Charitable giving is an integral part of holistic financial planning, and all advisors should treat it that way.

Brad Offman is the Founder and Chief Executive Officer at Toronto-based Spire Philanthropy, a management consultancy specializing in providing philanthropic advisory services to family offices and financial institutions. Brad is also a co-founder and Chief Curator of the Partnership Conference. He is the former Senior Vice President, Strategic Philanthropy at Mackenzie Investments, and former President of the Mackenzie Investments Charitable Foundation. Prior to joining Mackenzie, Brad served as Vice President, Development at the Toronto Community Foundation. Brad sits on the Board of Directors of the V-42 Foundation, the CAGP Foundation and Benefaction Foundation. He is a past member of the National Advisory Council for Imagine Canada and a past board member of Philanthropic Foundations Canada and the Association of Fundraising Professionals. Brad holds a master’s degree in business administration and a master of arts degree from the University of Toronto and a First Class Honours Bachelor of Arts Degree from McGill University in Montreal. He also proudly holds the Master Financial Advisor – Philanthropy designation.

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