Financial advisors not meeting client needs due to lack of philanthropy knowledge, research finds
Melanie May | 19 December 2023 | News
More than one in five financial advisers do not know how to offer wealthy clients support on becoming philanthropists despite demand rising among younger affluent generations for advice on how to distribute their wealth to charities, according to new research by Charities Aid Foundation.
5% of 215 independent financial advisers (IFAs), wealth managers and planners surveyed by CAF said they are “very confident” about advising clients on philanthropy and half of all surveyed said this was due to a lack of training in the profession.
CAF also found that almost three quarters (72%) do not include philanthropy as part of their initial fact find with clients, although 21% say they see a direct link between providing philanthropic advice and winning new business.
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CAF is calling on the profession to increase awareness and training in the UK to ensure some of the £5.5 trillion set to pass between generations within the next thirty years finds its way to charities.
A separate CAF survey of 500 high-net-worth individuals found that a third consider themselves to be a philanthropist and 62% say that giving to charity is an important part of their life. Demand for advice is rising among younger generations, with more than half of 18-34 year-old HNWIs (57%) and 49% of 35-54 year old HNWIs saying an adviser could help with their philanthropy.
The research found around 42% of advisers said they plan to increase their knowledge of philanthropy and how to advise clients on it, however 22% said they did not know where to signpost clients for the expertise they need. By comparison, those who regularly give philanthropy advice said it helped them build on existing relationships with clients. Around 56% of advisers said they saw it as an opportunity to get to know their clients better, and nearly half said it makes them feel closer to their clients.
Mark Greer, Managing Director of Giving & Impact, Charities Aid Foundation said:
“The next generation are expected to be the most significant donors in history. But it is how they approach their giving that makes them different from previous generations. As philanthropy advisers, we know it is essential to understand the motivations, values and attitudes of clients, as well as the mechanisms available to them, to ensure philanthropy is as effective as it can be.
“We would like to see philanthropy added to CPD and industry qualifications for financial advisers to ensure that private client advisers are able to better meet the needs of their clients. Forward-thinking advisers looking to provide a holistic service to the next generation would be amiss to ignore this rich topic of engagement.”
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About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.