New research from Fidelity Charitable shows that more wealthy individuals who use financial advisors are giving to charity than advisors estimate. They are also giving at higher levels.
Advisors to high-net-worth clients figured that 48% of their client base made charitable giving an annual activity or financial goal. In fact, a separate survey showed that 93% of affluent individuals who work with a financial advisor made annual charitable contributions.
The findings are part of Fidelity Charitable’s 2012 “Advice & Giving” research released Wednesday. The comparative study comprised two surveys conducted in March: one of 146 financial advisors with clients averaging at least $1 million in investable assets, and another of 183 individuals with at least $1 million in investable assets and $100,000 in household income who use a financial advisor.
Advisors responding to the survey estimated that on average, 54% of clients had given $2,500 or more to charity in the past 12 months. However, 51% of the clients surveyed reported that they donated at least twice that amount—between $5,000 and $100,000 or more—each year.
“Charitable giving is a key, annual activity for the vast majority of wealthy individuals working with advisors,” Sarah Libbey, president of Fidelity Charitable, said in a statement.
“Advisors who take time to talk about this important financial subject are tapping an opportunity to better understand their clients and their immediate and long-term goals. It’s also an opportunity that can ultimately result in bringing in more assets for the advisors to manage.”
The research also showed that both advisors and clients benefit from charitable planning discussions, especially when charitable giving is integrated into a client’s overall financial plan. Seventy-six percent of clients said such discussions facilitated tax planning, and 47% said they enabled them to give more money to charity, among other benefits.
For their part, 72% of advisors with clients averaging at least $1 million in investable assets said offering financial strategies for charitable giving was a relationship builder, and 57% said it helped position them as a broad financial expert.