Fidelity Charitable® survey focuses on the impact of tax reform on
financial advisors and philanthropy; Nearly half of advisors say that
clients increased their giving overall
BOSTON–(BUSINESS WIRE)–The Tax Cuts and Jobs Act signed in December 2017 overhauled the
American tax code. It also altered how advisors are thinking of
charitable giving and bringing philanthropy into conversations with
clients. Fidelity Charitable®, an independent public charity and one of
the nation’s largest grantmakers, released today a survey revealing how
post-tax reform, advisors are increasingly embracing and promoting
charitable strategies to their clients.
Nearly half of advisors report that, following more than 10 years of a
bull market and a major overhaul of the tax system, many or most of
their clients adjusted their charitable giving strategy in response to
tax reform. Specifically:
-
47% of advisors say that many or most clients increased giving overall
due to the loss of other deductions - 46% say they established a donor-advised fund
- 46% say they donated appreciated securities to maximize deductions
-
44% say they employed a bunching strategy to maximize charitable
deductions
“Giving to charity is a decision that clients make from the heart, but
most would be delighted to be able to give more if they had guidance on
how to give more strategically. Tax reform raised awareness on the part
of advisors of the need to help clients be more thoughtful about the
timing, assets and methods used for giving as a part of a holistic
financial plan,” said Karla Valas, senior vice president, fundraising
and distribution at Fidelity Charitable.
In the wake of tax reform, advisors have adapted their
recommendations and increased their conversations with clients about
charitable planning. In fact, more than a third of advisors
recommended that the majority of their clients adjust their charitable
giving strategy post-tax reform.
Additionally, advisors seem to have recognized that charitable giving
has become a more prominent part of providing holistic financial and
wealth management services and are having more philanthropic
conversations with their clients. In fact, since 2015, the number of
clients with whom advisors discuss giving has risen significantly from
46%to 58%. At the same time, both of these points suggest that advisors
may not be discussing charitable giving broadly enough with their client
base and that additional opportunities exist to expand their charitable
conversations to help clients maximize their giving and minimize their
tax burdens.
Advisors also increasingly understand that charitable giving vehicles
are not only for ultra-high net worth clients but are important
financial tools from which a wider array of clients could benefit.
Today, advisors believe that more than half of their clients could
benefit from a charitable giving vehicle, like a donor-advised fund or
private foundation. Four years ago, that number was 41%.
Though many advisors seem to be comfortable discussing a variety of
charitable topics with clients, most want to learn more about
philanthropic planning and are seeking advanced education so they can
engage even more deeply. Fidelity Charitable has seen this trend through
its complimentary Charitable Planning Practice Management program, which
provides advisors with the educational resources and training needed to
incorporate charitable planning and sophisticated philanthropic
strategies into their practice.
“Advisors who are knowledgeable and confident about charitable planning
can help their clients make the most of their generosity—in ways that
can benefit them and the charities they care about,” concluded Valas.
For the complete report and additional insights, visit:
https://www.fidelitycharitable.org/insights/advisor-conversations-after-tax-reform.shtml
https://www.fidelitycharitable.org/docs/advisor-conversations-after-tax-reform.pdf
Methodology
W5, an independent research firm, conducted a research study on
behalf of Fidelity Charitable about financial advisors and the
charitable conversation. 250 professional advisors in the U.S. were
surveyed in 2019, including financial advisors, certified public
accountants (CPAs), and attorneys. This data analysis focuses on data
collected from 175 financial advisors whose assets under management have
a total market value of $25 million or more.
About Fidelity Charitable
Fidelity Charitable is an independent public charity that has helped
donors support more than 278,000 nonprofit organizations with nearly $35
billion in grants. Established in 1991, Fidelity Charitable launched the
first national donor-advised fund program. The mission of the
organization is to grow the American tradition of philanthropy by
providing programs that make charitable giving accessible, simple and
effective. For more information about Fidelity Charitable, visit https://www.fidelitycharitable.org.
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Contacts
Corporate Communications
(617) 563-5800
[email protected]
Sophie
Launay
(617) 563-9171
[email protected]
