Advisers still uncertain around philanthropy
The level of advisers providing guidance to clients around philanthropic giving has climbed since the introduction of the Future of Financial Advice (FOFA) reforms but many advisers still remain unaware how receptive clients can be to the idea and the ease in which trusts can be created and maintained.
Equity Trustees, General Manager, Philanthropy Tabitha Lovett said the best interest duties and need to demonstrate value to clients inherent in FOFA has seen advisers considering philanthropic and charitable giving as part of tax and estate planning strategies.
According to Lovett philanthropic trusts can be set up in two days with a minimum of $20,000 seed funding and are being created increasingly by self-managed superannuation fund trustees — many who chose to oversee the investments of the philanthropic trust.
Lovett said any funds placing into a trust would be immediately tax deductible with ongoing donations and the maintenance of the trust able to be folded into a wider financial plan and estate plan where clients intended for the trust to be perpetual.
"This is a straightforward conversation for financial advisers to have with their clients but there may be a lack of awareness of how easy they are to set up or some concern about the client's own future needs," Lovett said.
"Advisers can act here to assist clients to only place in what they would normally give to charitable causes with the advantage that the client controls the direction of the giving."
"They can also communicate there is more to life than the accumulation of wealth and shift from focusing on the superficial or ‘what's in it for me' to what can I do long term with the wealth that has been created. The idea of doing good resonates with clients and this conversation is not usually poorly received when raised by an adviser."
AUTHOR
Jason Spits
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