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Are Advisors Out of Touch with Clients' Charitable Habits? Bah, Humbug

Can it be true that a striking number of financial advisors are out of touch with the charitable habits of their clients, as the latest figures from Fidelity Charitable suggest? I’m a little skeptical.

This week the charitable unit of Fidelity Investments released results from two surveys taken in March, one of 500 advisors (including 146 with average client assets of at least $1 million) and another of 183 wealthy individuals with a minimum of $1 million in investable assets.

The survey of advisors with the $1 million clients found the advisors estimating that just 48 percent of their client base made charitable giving an annual activity or financial goal. Yet in the survey of investors, 93 percent at the same asset level who work with advisors said they make charitable donations annually.

Advisors also low-balled what’s being donated, Fidelity said. They estimated that 54 percent of clients with more than $1 million in assets gave $2,500 or more to charity in the previous 12 months. But 51 percent of the investor survey said they give between $5,000 to $100,000 or more annually.

There’s certainly an argument to be made that advisors might not be in tune with what their clients are giving away; high-net-worth investors are likely to work more closely with CPAs on the subject, since there are tax implications.

But the two surveys poll two separate populations, and the investors in one are not the clients of the advisors in the other. It would be better to poll both advisors and their clients, but the mechanics of pulling that off would be difficult.

“Generally speaking, I think the concept does hold,” says Sarah Libbey (above), president of Fidelity Charitable. She thinks that advisors who take time to discuss charitable behavior with their clients can better understand them and their goals; indeed, 72 percent of advisors surveyed by Fidelity say such conversations help build relationships.

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