ELITE ADVISOR BEST PRACTICES

Three Timely Reports for Elite Advisors

Mastering philanthropy, charitable giving, and financial literacy can help you grow your practice while working with clients to make a better world.

By Valentino Sabuco, CFP®, AEP®

Key Takeaways:

  • Over 120 million Americans do not have up-to-date estate plans to protect themselves and their families—and to reduce estate transfer costs.
  • Elite advisors can help solve this problem.
  • Many people mistakenly believe that since they are not “rich” they do not need to do any estate and financial planning.
  • Elite advisors can help resolve this misunderstanding.
  • Clients will transfer $59 trillion amongst heirs, charities, estate taxes, and estate closing from 2007 to 2061.
  • Elite advisors can play an important role in this massive wealth transfer to families and nonprofits and help increase it for generations to come.


Three very important reports have just been released that contain excellent information and tools to help elite advisors grow their practices. Here is a summary of each. You are welcome to circulate these reports as you see appropriate.

1. A Golden Age of Philanthropy Still Beckons: National Wealth Transfer and Potential for Philanthropy

The Center on Wealth and Philanthropy at Boston College has recently released this landmark study by researchers John J. Havens and Paul G. Schervish.

See and download the executive summary, press release, and full report.

The research on wealth transfer and charitable giving reveals that an estimated $59 trillion—divided among heirs, charities, estate taxes, and estate closing costs—will be transferred from 116 million American households between 2007 to 2061. It will be the greatest transfer of wealth in U.S. history—far surpassing the estimate of $41 trillion contained in the Center’s 1999 study.

Highlights include:

  • Through estates, heirs will receive $36 trillion.
  • Federal estate taxes will claim $5.6 trillion.
  • The sum directed from final estates (for which there is no surviving spouse) toward charity is estimated at $6.3 trillion.
  • Total gifts to charity during the study period are vastly greater, according to the study, which estimates that lifetime giving will yield an additional $20.6 trillion for charity from 2007 to 2061.

According to Professor Schervish, “these estimates present an extraordinary opportunity for nonprofits today and in coming years.” Professor Schervish believes that “the most important implication of the study is that channeling these (financial) resources into effective outcomes will allow us to make the greatest inroads in history on solving—not just attending to—our nation’s and our world’s most pressing problems and prospects.”

Elite Advisor Note: Helping clients build and manage wealth followed by helping clients plan for the use and transfer of wealth creates many fantastic business opportunities for elite advisors and many very important services for clients.

2. 2014 Fidelity Charitable Giving Report

Fidelity Charitable states that 86 percent of its donors discuss giving plans and philanthropic planning with their families at least once a year. The report offers a deeper look into who Fidelity’s donors are and how they give. The report also provides advisors with tips and strategies about broaching the topic of family philanthropy with clients.

For instance, a donor-advised fund is a charitable giving vehicle that provides philanthropic clients with an easy-to-establish, low-cost way to administer charitable donations on behalf of an organization, a family, or an individual. It is an excellent alternative to direct giving or creating a private foundation.

Highlights include:

  • 86 percent of Fidelity Charitable donors discuss giving plans and philanthropic planning with their families at least once a year.
  • From 2008 to 2012, the number of individual donor-advised fund accounts in the U.S. grew 17 percent.
  • On average, donors establish Giving Accounts in their mid-50s and then use them for frequent granting.
  • While the average grant size has remained relatively flat over the past decade, the number of grants per account and the number of charities supported continue to grow steadily.

Download the 2014 Fidelity Charitable Giving Report

Elite Advisor Note: Helping clients address the topic of family philanthropy and the various tools and strategies involved can create new business opportunities for advisors. It’s also a service deemed highly valuable by your clients.

3. 2014 Spring Improving Financial Awareness & Financial Literacy Campaign Report

The Financial Awareness Foundation reported that the 10th annual National Financial Literacy Month (April) campaign was a huge success and is fast becoming one of the nation’s most broad-based, multifaceted campaigns for improving financial awareness and financial literacy.

Highlights include:

  • An estimated 120 million Americans do not have up-to-date estate plans to protect themselves and their families, thus making estate planning one of the most overlooked areas of personal financial management.
  • The majority of Americans lack the ability to plan for their retirement adequately, as most Americans over age 65 are highly dependent on Social Security.
  • Many people believe that since they are not “rich” they do not need to do estate or financial planning. Not so!
  • The need to address financial literacy has generated significant support and participation from leading financial service and nonprofit associations. Many other leaders have joined them:
  • President Obama made a new proclamation.
  • Eleven state governors signed proclamations.
  • Missouri Secretary of State Jason Kander signed an Investor Bill of Rights.
  • The American Institute of Certified Public Accounts (AICPA) and Littman Krooks LLP provided public and professional national webinars.
  • The Wisconsin Institute of Certified Public Accountants (WICPA) put together a special Financial Literacy Program.
  • Wealth management firms provided estate-planning checklists within client newsletters.
  • National associations such as AICPA, the American Association of Attorney-Certified Public Accountants, the Association of Fundraising Professionals (AFP), Society of Financial Service Professionals (FSP), National Academy of Elder Law Attorneys (NAELA), Financial Planning Association (FPA), and Partnership for Philanthropic Planning (PPP) encouraged members to participate.
  • Media provided estate and financial planning articles and checklists:

This is an engaging and winning approach to solving a major social challenge while helping to build the elite advisor’s business and to assist nonprofits in finding solutions to our domestic and international pressing problems and social challenges.

  • Families benefit by learning how to prepare for and deal with personal financial challenges on a cost-effective basis.
  • Financial professionals and their companies benefit by acquiring new business from more informed and motivated clients.
  • Nonprofits win with increased donations, planned gifts, alternate beneficiary selections, and bequests.
  • High-quality financial support providers benefit from more transactions from growing financial service companies and nonprofits.
  • The overall community wins with a stronger and financially sound economy.

This is really exciting!

What are you and your organization planning to do for National Estate Planning Awareness Week (October 20–26)?

Download the 2014 Spring Improving Financial Awareness & Financial Literacy Campaign Report

Elite Advisor Note: To learn more about this and some fun ways to solve major social challenges while taking your practice to new heights, review this prior Elite Advisor Report article, “Solve Major Social Challenges and Take Your Practice to New Heights.”

Conclusion

We are living through the greatest transfer of wealth (and wealth transfer costs) in our nation’s history. Elite advisors have an excellent opportunity to assist their clients and to help educate the public about:

  1. Wealth accumlation, growth, and asset management opportunites—thus substantially increasing potential wealth transfer.
  2. Estate transfer tools and techniques that can reduce estate transfer costs—thus increasing the assets transferred to families and nonprofits.
  3. Philanthropy—thus generating more human and financial resources that can help solve our nation’s and our world’s most pressing problems and challenges!

Wishing you much success and all the very best! -Valentino.

www.TheFinancialAwarenessFoundation.org


About the Author

Valentino Sabuco, CFP®, AEP®, is the executive director and publisher of The Financial Awareness Foundation, a 501(c)(3) nonprofit located in Sonoma County California. Valentino has pioneered the financial planning profession for over 40 years. TFAF serves as a nonpolitical and neutral “financial awareness advocate” for the public, the professionals and their associations, educational institutions, and nonprofits. Our mission is to significantly help solve a major social problem by dealing with the lack of financial awareness and financial literacy. We believe teaching financial literacy is very important as it gives people the essential tools to address everyday financial decisions in a more informed manner. Valentino can be reached at V.Sabuco@TheFinancialAwarenessFoundation.org or (707) 586-8620.