Giving can be win-win for advisers, clients

May 14, 2008

Financial advisers have a conflict of interest in deciding whether to raise "the giving question" with their clients, a new report says.

Any major gift reduces the donor's assets under management, and consequently, the paycheck for the donor's advisor.

Yet there are compromises that benefit both the potential donor and the advisor's practice, says Charles B. Maclean in his report on the relationship between financial advisers, their clients and professional fundraisers.

When weighing philanthropic choices, the wealthy are far more likely to consult nonprofit staff or their own peers than their wealth management advisers, according to an October 2006 survey from the Center on Philanthropy at Indiana University and Bank of America.

Maclean sees this as a lost opportunity for all involved.

His report offers tips for financial advisers who want to deepen their philanthropy practice, advice for fundraisers on working with financial advisers, and suggestions for building donor trust.

Giving choices like setting up a foundation, trust or donor-advised fund, allow a financial advisor to continue to be involved in managing the client's gift.

Such vehicles also can maximize an advisor's long-term revenue by deepening client relationships and increasing the potential for referrals, the report says.

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