More help needed

Three-quarters of financial advisers do not help their clients with philanthropic planning, despite the market exceeding $5.7 billion, according to experts.

 

Planners who advised on philanthropy engendered trust and loyalty between themselves and the client, reinforced the fee-for-service approach and increased their assets under management, Stewart Partners chief executive officer Nigel Stewart said. “We see it as being very much core to our wealth management practice because we see more and more people who are looking at being fully engaged in giving for part of their life,” Stewart said.

 

In the United States about 15 per cent or US$6.1 trillion of the US$41 trillion that will be passed between generations over the next 40 years will go towards charity. “In Australia it's hard to get one's mind around the numbers, but we're talking about many, many tens of billions of dollars that your clients will be passing through to charity over the next 20 to 30 years. It is important that (planners) become engaged in this concept,” Stewart said.

 

In 2004, individuals gifted $5.7 billion in Australia to charities, which is growing at a rate of 12 per cent a year. A Queensland University of Technology survey of financial planners found 75 per cent did not help clients with philanthropy, Stewart said.

 

“They don't understand the area, they have a high level of interest in developing knowledge in this area, but they don't know how to probe their clients to determine what is important to them,” he said.

 

Philanthropy consultancy Enrich Australia director Tim Hardy said prescribed private funds were the vehicle of choice.