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Advisors Who Offer Philanthropic Planning Reap the Benefits

A recent study by Fidelity Charitable highlights just how much of an advantage these planners have.

Traditionally, during challenging times, Americans have opened their checkbooks, and philanthropy experiences a dramatic uptick.

The pandemic era has been no different. In 2020, charitable giving hit a record level of $471 billion. With no true end to COVID-19 in sight, 2021 looks to be another big year for giving, and that’s a major opportunity for advisors.

Contrary to popular belief, the vast majority of charity in this country stems from smaller individual donors and bequests, not larger entities, like corporations and foundations. With such a broad swath of client profiles potentially interested in giving, advisors who are comfortable operating in that space and facilitating client philanthropy will be at a dramatic advantage.

According to a recently released study by Fidelity Charitable, advisors offering charitable planning tended to have significantly greater assets, organic growth and new money. An analysis of over 1,200 RIAs and family offices found that those who offer charitable planning had 6x the median assets, 3x the median organic growth and 1.3x the median new money per investor as compared to advisors who don’t.

And the benefits extend beyond traditionally measurable assets. According to another Fidelity study in 2020 that surveyed 1,181 investors, half of whom were millionaires, clients who receive charitable planning are more loyal and likely to recommend their advisor compared with those who don’t. Such advisors outperformed their colleagues among respondents answering questions, including: “I trust my primary financial advisor to make decisions that are in my best interest” (7% greater); “My advisor demonstrates that he/she is considering my unique needs/ goals/preferences” (13% greater); and “My advisors is a multigenerational resource to my family” (27% greater).

Further, advisors who offer charitable planning tend to have a larger wallet share (81% vs. 76%) and a significantly higher proportion of clients with more than $1 million in managed assets (33% vs. 18%) than their colleagues who don’t perform similar services.

And there’s little end to this trend in sight, as the uptick in philanthropy is not simply pandemic related. Overall philanthropy levels have steadily climbed in the past 50 years, effectively tripling since 1980. Ultimately, the data all points to the same conclusion: It’s increasingly critical for advisors to realize that strategic charitable planning should now be a part of all of their client conversations, regardless of client wealth.

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