On Philanthropy: What Do Your Clients Expect From You?
4 Strategies for Deepening Your Client Relationships
Did you know that 82% of high net worth individuals believe their advisor plays an important role in their philanthropy, and nearly all talk with their advisor at some point about their charitable goals? Your clients know there’s a better way to approach their giving, but they often don’t know where or how to start.
Yet, only 41% are fully satisfied with these philanthropic conversations.
As an advisor, you have an unparalleled opportunity to influence charitable dollars in ways that are good for your clients and good for your practice.
How equipped are you to have these crucial conversations?
US Trust recently conducted a study* to better understand the philanthropic conversations between advisors and their high net worth clients. It revealed several key disconnects between what clients want from their advisors when it comes to philanthropy, and what those advisors are actually offering. Failure to close this gap can leave you vulnerable.
Here, we highlight four key disconnects US Trust discovered, and offer an actionable take on how you can use this intel to deepen client relationships, differentiate from other advisors, and better serve your clients across generations.
Strategy #1: Talk about their philanthropy earlier in your relationship.
Most advisors wait to talk about their clients’ philanthropy until they’ve developed a full understanding of their clients’ financial picture and personal lives. However, nearly all high net worth clients want to talk about it much sooner – in the first few meetings.
How can you start these conversations earlier? Ask some key questions early on to gauge your client’s interest in philanthropy:
- Is philanthropy (giving of your time, skill, and wealth) an important part of your life? If yes, how?
- Do you believe your giving is aligned with your most important goals and priorities?
- What are your philanthropy goals over the next 12 months? 5 years? 10 years? In your lifetime?
Strategy #2: Incorporate a more balanced conversation.
High net worth clients often feel their advisors focus too much on the technical side and not enough on understanding their personal passions and interests. We’ve found that when advisors start from a deep understanding of what breaks their client’s hearts, what motivates them, what they hope and fear for future generations, and the change their clients want to see happen in the world, advisors can deepen relationships in a powerful way.
How do you understand your clients’ passions and interests? Try incorporating the following questions into your practice:
- What brings you joy in your giving? What robs it?
- What would you say most accurately describes your personal values (those values that guide your living)? Your generosity values (those that guide your giving)?
- If you could make any specific difference in your community/world, what would you most like to impact or transform?
Strategy #3: Talk About Impact.
The number one issue holding donors back from giving more is impact, not fear of inadequate wealth. They question whether their gifts will be used wisely by the charities they support and whether or not their giving is truly making a difference.
You can help your clients become savvier givers by helping them develop a clear strategy that helps them achieve the difference they want to make and maximize their tax and legal benefits. Also, equip them with questions to ask charities about their impact, such as:
- What difference are you making? How do you know?
- What are you learning about what it takes to achieve this success?
- If there was one thing that would help you achieve your desired success, what would it be? Why?
Strategy #4: Engage the family.
Surprisingly, U.S. Trust’s report found that only a small fraction of advisors talk with their clients about how to involve future generations in their philanthropy. This is unfortunate because many high net worth individuals see giving as a way to create family cultures and traditions. For many clients, their deepest hopes and fears lie in their love and concern for the next generation. Facilitating a conversation with your clients around legacy and philanthropy is a powerful way to deepen your bonds with a family across generations.
So, start by asking your clients:
- What values and traditions do you hope to pass on to future generations?
- How do you believe philanthropy can help achieve this?
By closing the gap on these four key disconnects you have an opportunity to deepen your status as a trusted advisor and leave a more enduring mark on your clients’ lives, while protecting their wealth through generational succession. Family philanthropy may be the most powerful opportunity to preserve wealth through its transfer.
* Research referenced in this article comes from the U.S. Trust Study of the Philanthropic Conversation: Understanding Advisor Approaches and Client Expectations, 2013.