There have been several articles in recent years about the number of heirs and spouses who changed financial advisors and firms after the death of a parent or spouse, who were the primary wealth creators. Various studies have shown that around 70% of widows and 90% of children leave after the property is settled.
To avoid this escape, many of the authors of these articles recommend that counselors involve their clients’ spouses and children early in the relationship, include them in periodic meetings, listen to their concerns and goals, and be sensitive. That they may have different goals and ideas than the primary customer in the relationship. This advice is reasonable because at a certain point, the spouse and children will be the ones who control the money and make the decisions, and if they don’t know the advisor, the chances of staying are very slim.
The advisor’s knowledge of the charitable plan and willingness to participate in the conversation may not be the most important reason why clients want and stay with the advisor. However, for many high-net-worth clients who are philanthropists, the charitable planning conversation is very important because philanthropy is a high priority.
Discussing a charitable plan with clients with philanthropic views helps counselors demonstrate that they are eager to help achieve all of their goals. Whether an advisor helps clients make qualified charitable distributions from their individual retirement account, establishes a donor-advised fund (DAF), private foundation, charitable trust or donates directly, the client appreciates the help and discussion. We do. As a side benefit, philanthropic clients regularly refer friends or colleagues with similar interests to their mentors who provide this guidance.
women more involved
Studies by the Women’s Philanthropy Institute at Lilly School of Philanthropy, US Trust, Barclays and others have indicated that women are more likely to donate, volunteer, engage more in their giving, and involve their children in philanthropic activities. Chances are. Because women are more passionate about their philanthropy and tend to have longer life expectancies than men, mentors who engage women to discuss their charitable interests can serve as clients after the death of their spouses or partners. more likely to be retained.
children of customers
Getting to know children can be a little more challenging because they may not be as available or interested in meeting with their parent’s counselor. However, many children are more or more interested in charitable activities than their parents because they volunteer, serve on junior or regular boards, or are volunteers. They may be involved in charities that are similar or different from what their parents support.
Family charitable vehicles such as DAFs or Foundations provide great opportunities to engage children to understand what their responsibilities may be and to determine to what extent and when they want to participate. Involving clients’ children in charitable conversations during clients’ lives can help children gain input so they can decide whether to carry on the family’s charitable traditions or determine whether to take a different direction. want to go or not. Some families with foundations may set up a DAF for their children who wish to deviate from the Family Foundation’s mission, but by identifying everyone’s goals in advance, counselors can help determine the best path for the near and distant future. can do.
This is true for clients who are not married or have children, as relatives or friends become successor advisors on these charitable vehicles when the donor wants these accounts to continue after their passing. DAFs and Foundations enable financial advisors to remain in their roles on these and their other accounts for many years.
Discussing a bequest to a DAF, foundation or charity or naming them as beneficiaries of retirement or other plans while the parents are alive can eliminate any shock or disappointment if the heirs find out after death. . When adult children know in advance that their parents will be leaving money for a charity or charitable vehicle, they will generally welcome this information and be proud to know that this is the plan. Years later, they can follow in their parents’ footsteps and do the same with their children.
deepen relationships
Talking with clients about their charitable plans also helps consultants deepen their relationships with clients and increase their contact with spouses and children, which will hopefully help the client after the death of the wealth maker. Will remain as This conversation helps to demonstrate to clients that they are interested in the family and their philanthropic goals and not just in managing their wealth.
Ken Knopper is the vice president and senior philanthropic advisor of the American Endowment Foundation (AEF) Donor-Aided Fund.
