Philanthropy discussion builds adviser trust

Talking about philanthropy when constructing or reviewing a financial plan for clients can help advisers build trust and aid them in the regulator-required ‘know your client' process, according to Equity Trustees.

General manager, philanthropy, Tabitha Lovett, said advisers who had detailed discussions with clients about their philanthropic goals had a greater understanding of "what makes their clients tick", hence fulfilling the ‘know your client' requirement.

Advising clients on how to give in structured, tax effective ways, and discussing philanthropy with estate planning clients saw an increase in the amount of money directed towards charitable organisations, Lovett said.

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"Our experience has been that one in five of all new wills written has contained a philanthropic intent, either a portion of an estate into an existing foundation or the creation of a new charitable trust or a charitable bequest," she said.

This was in line with research carried out in the UK, which showed that discussing philanthropy with estate planning clients increased giving by around 20 per cent.

There were three types of charity tools: private ancillary funds (PAFs), sub-funds with public ancillary funds (PUFs), which have lower start-up costs than a private one, or testamentary charitable trusts.

"Establishing a PUF provides all the benefits of a PAF but simplifies the administration and reduces costs as the expense of audits, tax reporting and administration are spread across the foundation as a whole, rather than by the individual sub-funds," Lovett said.




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