Market research conducted by Philanthropy Impact and the London School of Economics Marshall Institute suggests professional wealth advisors in the UK play a significant role in their clients’ philanthropic efforts but are failing to use their influence.
The findings are based on the assessments of 383 top professional advisory firms, interviews with 22 advisers, and the surveys of 503 wealthy and ultra-wealthy clients.
The research looked at the prevalence and kinds of philanthropy services offered by the firms and the effects of philanthropy services on clients.
According to the research, 28 per cent of the assessed firms offered some level of philanthropy advice. The advice was mapped in the categories of planning services, implementing services, and monitoring/reviewing services. Few firms offered comprehensive advice in all three categories. The majority of advice offered was for planning and implementation services, such as creating a philanthropic strategy and setting up a giving structure. Very little advice was provided in terms of monitoring the impact of the giving or tax reporting.
Researchers found many wealthy individuals were disappointed with their advisors’ philanthropy services, rating the services 5.9 out of 10 on average. According to separate market research by CAF, the wealthy want more and better philanthropy guidance. They seek returns that are ‘values based’ and not just financial returns.
Professional advisors play a vital role in encouraging these returns. 12 per cent of the UK’s wealthy receive philanthropy advice yet their giving accounts for 58 per cent of the estimated £1.3 billion that wealthy citizens gave to good causes. The research also claims that ultra-wealthy give 17 times more when guided by their advisors.
Increasing philanthropic advising can have a number of benefits for firms. These include attracting more clients, aligning more effectively with client interests, creating deeper relationships around shared values and goals, and initiating discussions about long term financial goals.
The study concludes one of the main reasons for the lack of giving among the UK’s wealthy is because advisors have not yet gained the knowledge to effectively guide and support their clients’ philanthropic efforts.