Remember A Charity has published a guide to help wealth advisers incorporate discussions about charitable legacies and philanthropic giving into client conversations alongside financial and estate planning.
The guide, Integrating Charitable Legacies into Wealth Planning, outlines prompt questions for conversations on values, personal interests and fiscal incentives for charitable giving, for both advisers and high-net-worth clients.
Research published last year by the Charities Aid Foundation found that just over a third (36 per cent) of wealth advisers believe it is important to discuss philanthropy with their clients, findings echoed by a survey of high-net-worth individuals conducted by Barclays Bank in October last year.
“Although most donors consider philanthropy an important part of their lives, a significant proportion of charitable giving takes place without the involvement of a professional adviser,” said Joe Crome, head of business development and CAF American donor fund at CAF.
“This is a missed opportunity – for greater impact, better alignment with personal values and more thoughtful legacy planning.”
Remember A Charity’s report acknowledges that advisers may be reluctant to broach “what may be perceived as sensitive discussions around mortality”, but that in practice they can “mitigate such concerns by clarifying the scope and boundaries of any philanthropic conversations, using values-led questions to help clients navigate the options [and] providing guidance on the relevant philanthropic structures and tax incentives.”
It advises wealth advisers to integrate the philanthropic approaches of their clients into their overall wealth plans, saying it is important to be “well-versed in relevant tax reliefs such as Gift Aid, Capital Gains tax exemptions, and the inheritance tax incentives for legacy giving.”
Advisers should take time to build their understanding and knowledge of the charity sector, including joining philanthropy networks and attending charity events, according to the report, and collaborating with specialist philanthropy consultants for additional support where required.
It also points out that philanthropic goals evolve with time, and wealth advisers “should periodically revisit clients’ philanthropic goals to ensure they remain aligned with changes in life circumstances, their financial situation, or charitable interests”.
Lucinda Frostick, director of Remember a Charity, said: “Wealth advisers can play a vital role in opening up discussion about legacy giving – whether that’s during financial or succession planning, or as part of a broader discussion about client values and philanthropic goals.
“Such conversations can be a deeply fulfilling aspect of wealth planning – beneficial for clients and advisers alike. It empowers clients to make informed, meaningful and values-led decisions that achieve a lasting impact, while enabling them to pass on the gift of philanthropy to future generations.”