When financial advisors bring up philanthropic giving as part of a holistic wealth management strategy for clients, those advisors’ own charitable involvement can often arise. That provides advisors an opportunity to share their values and lead by example.
Many are charitably inclined and donate either their time or their money for worthy causes. But it can be challenging for advisors to bring up the conversation around strategic charitable giving strategies out of the blue when discussing investments or other financial matters, says Jeremy Hampson, senior wealth advisor at Assante Capital Management Ltd. in Montreal.
“If you’ve never spoken to your clients about charity and they come in and think they’re going to have a meeting to discuss their wills or their portfolios and you start [the conversation] with, ‘Have you ever thought about giving away half your estate?’ It’s not going to go very well,” he says.
One way to start the conversation is by looking at the charitable donations that clients included on their annual tax returns or by inquiring about their participation in fundraisers they may happen to be involved with, he says. Then, clients will often also ask about an advisor’s volunteer or philanthropic activity, which can help create that connection on the subject.
Mr. Hampson’s story with charities goes back almost 50 years, as his family was involved in grassroots organizations to support his sister with special needs. As an advisor, he began giving presentations on planning for special needs families, which led to fundraising and involvement with boards. He’s currently president of West Island Association for the Intellectually Handicapped, a charity in Montreal that assists people with intellectual disabilities, autism and their families.
Discussing his own charitable involvement usually leads to a larger conversation about philanthropy and ultimately strengthens the advisor-client relationship, Mr. Hampson says.
“[Clients then begin] to understand what makes me tick and what I’m passionate about,” he says. “It humanizes who I am and what I’m doing, so it just really adds another dimension to that relationship.”
Not only is it helpful for advisors who discuss philanthropy with clients to lead by example, but as a matter of integrity, it’s critically important for them to be engaged in and passionate about their own charitable activities, says Keith Thomson, founding partner and managing director at Stonegate Private Counsel in Toronto, a division of CI Private Counsel LP.
“There are two ways to give, with time and [money], and for advisors to be walking the talk, they should be doing both,” says Mr. Thomson, who’s on the board of directors for the Canadian Association of Gift Planners.
Invariably, Mr. Thomson says clients will ask him about the charities to which he gives and works with during conversations about their charitable interests. He takes these opportunities to discuss his philanthropic journey, which spans almost 30 years, including serving on the boards of organizations like the Toronto Foundation and AMREF Health Africa in Canada.
“It’s a wonderful conversation that’s not about money. It’s about what they can do with their money to make the world a better place,” Mr. Thomson says.
Although philanthropy comes up in the context of estate planning with older clients who have accumulated wealth, Linda Shick, senior vice-president and portfolio manager, private client group, at Raymond James Ltd.’s Family Wealth Counsel Advisory Group in Toronto, says giving back is also particularly important for those in the younger demographic who have been involved in charities while they were in school.
“[Younger] people who have been referred to me check out [my] website and one of the things they say is [that my] community involvement is important [to them],” says Ms. Shick, who is a member of the Raymond James Canada Foundation advisory committee and serves on the board of directors at the St. Felix Centre in Toronto.
Indeed, according to the Case Foundation’s final Millennial Impact Report, which was released in 2019 and included analysis from a decade of surveying more than 150,000 U.S. millennials on how they interact with causes, this cohort makes philanthropic decisions based on personal connections and moves toward greater activism as they age.
“They can actually pick their advisors based on community involvement. So, I think that’s actually going to get more important as this generation builds wealth,” Ms. Shick says.
Ultimately, advisors looking to become more involved in philanthropy and giving back should consider causes or organizations with which they feel a personal connection and seek further information from not-for-profit professionals, Mr. Hampson says.
“Even if you don’t have the time to volunteer, then pick up the phone and have a conversation with the executive director of that place and find out what they’re looking for,” he adds.
With many fundraisers cancelled this year because of the COVID-19 pandemic, this is an ideal time for advisors to reach out and ask how they could help. (According to Imagine Canada’s Sector Monitor charities report published in May, almost three-quarters of charities reported a decline in at least one form of donations, with events-based fundraising affected most significantly.)
“A lot of advisors are really savvy when it comes to marketing and [developing] business opportunities, and that’s exactly what charities need the most help with right now – strategic thinking and fundraising capabilities,” Mr. Thomson says.
“For those advisors who are willing to volunteer time and money, this is the time to do it,” he adds.