Latest / Money to Give / Ep. 55 Part 2: Why Financial Advisors Must Embrace Charitable Planning with Erinn Andrews

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Ep. 55 Part 2: Why Financial Advisors Must Embrace Charitable Planning with Erinn Andrews · Money to Give

0:02
Speaker 1: Many financial advisors want to serve their clients well, but
0:06
Speaker 1: very few are equipped to help them give well. That
0:09
Speaker 1: gap is creating both a challenge and an extraordinary opportunity
0:14
Speaker 1: in the field of philanthropy. Today, welcome to Money to
0:17
Speaker 1: Give with me Rick Peck, the Philanthropy Guide. With over
0:20
Speaker 1: twenty years in the nonprofit sector, I have seen hundreds
0:23
Speaker 1: of millions of dollars transferred from donors to nonprofits. I
0:27
Speaker 1: have learned a lot along the way that I want
0:29
Speaker 1: to help convey to you, my loyal listeners. In this
0:32
Speaker 1: podcast series, we talk about one how nonprofits can most
0:36
Speaker 1: effectively showcase their mission and vision and raise as much
0:39
Speaker 1: money as possible. Two how donors and potential donors can
0:44
Speaker 1: make the greatest impact possible in the world. And three
0:47
Speaker 1: how professional advisors, including philanthropic advisors, can offer the most
0:51
Speaker 1: up to date information and services to their clients. So
0:55
Speaker 1: join us here each episode for more of that giving feeling.
0:58
Speaker 1: In today's episode, I'm joined once again by my friend
1:02
Speaker 1: Aaron Andrews, co founder of the Gift Team, whose work
1:06
Speaker 1: explores how financial advisors integrate charitable planning into their practice.
1:11
Speaker 1: Aaron shares insight from new research on best in class
1:14
Speaker 1: advisors who don't just react to charitable conversations, they initiate them,
1:19
Speaker 1: build values into relationships, and view generosity as essential to
1:24
Speaker 1: long term success. She also sheds light on emerging trends
1:29
Speaker 1: like consolidation in the advisor space, next gen values, and
1:33
Speaker 1: growing demand for philanthropic expertise. Those observations point to a
1:37
Speaker 1: rapidly shifting landscape, one where advisors who lean into philanthropy
1:42
Speaker 1: will grow, differentiate, and help clients live out their values
1:47
Speaker 1: with clarity and confidence. Let's begin, Aaron, welcome back to
1:54
Speaker 1: part two of our conversation. I was so glad to
1:56
Speaker 1: be with you. Last time. We covered so many excellent
2:00
Speaker 1: topics and we already got great feedback from people, so
2:04
Speaker 1: that's great. So today I want to go through two
2:08
Speaker 1: different topics with you, and as we did before, we'll
2:11
Speaker 1: it's just kind of bounce things back and forth. But
2:14
Speaker 1: let's start with things that you are excited about right now.
2:18
Speaker 2: Awesome, So thanks for having me back for part two.
2:21
Speaker 2: Great to be here and continue the conversation. So last
2:26
Speaker 2: time we talked quite a bit about donors and nonprofits
2:30
Speaker 2: and some of the things that I've been seeing in
2:32
Speaker 2: the field. A couple of things that get me really excited.
2:36
Speaker 2: And my career over the last five ten years has
2:40
Speaker 2: really been focused around financial advisors and how they support
2:46
Speaker 2: donors or not, clients or not, around charitable planning, and
2:51
Speaker 2: so one of the things that I'm really excited about
2:53
Speaker 2: is research that I'm contributing to right now that we're actively.
3:00
Speaker 3: Rolling out.
3:00
Speaker 2: So there's a group called the Donor Advised Fund Research Collaborative.
3:05
Speaker 2: It's a national it's sort of an unofficial official group
3:10
Speaker 2: of researchers who care about doing donor advised fund research.
3:15
Speaker 2: And when I was at Stanford University, I contributed to
3:19
Speaker 2: some of this research through a paper we published called Tubs, Tanks,
3:22
Speaker 2: and Towers about how donors use donor advised funds. From there,
3:28
Speaker 2: the DAFF Research Collaborative has done a lot of additional
3:31
Speaker 2: research from a lot of different perspectives, and they finally
3:37
Speaker 2: come around to looking at financial advisors and how financial
3:41
Speaker 2: advisors learn about donor advised funds. When did they learn
3:47
Speaker 2: about them? How much knowledge do they need to have
3:49
Speaker 2: about them before they're able to recommend them to a client?
3:54
Speaker 2: In what circumstances do they recommend them to a client?
3:59
Speaker 2: Why might they not recommend them to a client. What
4:02
Speaker 2: has worked really well with dafts for their clients and
4:05
Speaker 2: them in terms of management, what is not so great? Challenges,
4:11
Speaker 2: opportunities needs, lots and lots of questions.
4:15
Speaker 3: So this past summer I.
4:17
Speaker 2: Was able to interview a number of financial advisors as
4:22
Speaker 2: part of a focus group. We ran maybe four or
4:26
Speaker 2: five or six different focus groups across August, four to
4:30
Speaker 2: six financial advisors. And this was a really special cohort
4:35
Speaker 2: of professionals because they, for the most part, are pretty
4:40
Speaker 2: advanced in terms of charitable planning with their clients, and
4:45
Speaker 2: those conversations really painted a picture of what the best
4:50
Speaker 2: in class are doing.
4:51
Speaker 3: The best financial advisors out.
4:53
Speaker 2: There, they have been thinking about knowing about recommending dafts
4:59
Speaker 2: for decades. For many of them, they don't remember when
5:02
Speaker 2: they first learned about a DAFT. Maybe it was trained
5:07
Speaker 2: into them the first job they had at a financial firm,
5:10
Speaker 2: it was just part of what they did. Others do
5:13
Speaker 2: remember twenty years ago or fifteen years ago learning about
5:17
Speaker 2: dafts because they opened one for themselves. That was their
5:20
Speaker 2: first experience and exposure to donor advised funds. And what
5:25
Speaker 2: I've seen from those really thoughtful advisors those best in
5:29
Speaker 2: class in terms of talking about charitable planning with their
5:32
Speaker 2: clients is it is absolutely a part of what they
5:37
Speaker 2: do with every single client. Many of those advisors say,
5:40
Speaker 2: ninety percent of my clients have a DAFT, they come
5:43
Speaker 2: to us, we open a DAFT, We move their daft
5:46
Speaker 2: to our platform so we can manage everything, because then
5:50
Speaker 2: we can do everything for them. Now, not all of them,
5:53
Speaker 2: not all advisors out there are like that, but these
5:56
Speaker 2: are people who are managing a lot of money for
5:59
Speaker 2: a lot of clients. So charitable planning is absolutely something
6:03
Speaker 2: they bring up. They're bringing it up multiple times a year,
6:07
Speaker 2: certainly at least once in depth every year. And so
6:11
Speaker 2: it just painted a picture of really best in class
6:15
Speaker 2: advising charitable advising from financial advisors. So from those focus groups,
6:21
Speaker 2: we then crafted a survey that we're currently running. We
6:25
Speaker 2: want any financial advisor, whether they're new to the field
6:28
Speaker 2: or not, to participate in this, but we wanted to
6:31
Speaker 2: make sure we had questions that could capture newer advisors
6:35
Speaker 2: or advisors with less expertise around apts all the way
6:39
Speaker 2: to my most expert financial advisors who really have built
6:43
Speaker 2: this into their practice. And so we're currently running this survey.
6:48
Speaker 2: We're encouraging financial advisors all across the country to participate,
6:53
Speaker 2: and then we're going to be publishing this research next spring,
6:56
Speaker 2: making it freely available. I'll be giving lots of talks
6:59
Speaker 2: and my colleagues will as well, sharing the results of
7:02
Speaker 2: what we found, because it's also going to show us
7:05
Speaker 2: where are their gaps in terms of knowledge advisor knowledge,
7:09
Speaker 2: where are their opportunities? How many advisors think they're the
7:12
Speaker 2: ones talking about this with their clients versus how what
7:16
Speaker 2: percentage are their clients really the ones that are bringing
7:19
Speaker 2: this up with them, Rick, you and I both often
7:22
Speaker 2: cite the twenty eighteen US Trust study.
7:25
Speaker 1: Right, I was just thinking about that when you said that.
7:27
Speaker 2: Yeah, that twenty eighteen US Trust study looked at the
7:33
Speaker 2: charitable conversation between the advisor and the client, and what
7:37
Speaker 2: that found was, for the most part, clients felt like
7:41
Speaker 2: they're the ones bringing up charitable planning with their advisor,
7:45
Speaker 2: not the other way around, and felt like it should
7:48
Speaker 2: be the other way around, the advisor should be the
7:50
Speaker 2: one bringing up these topics. So this is some additional
7:55
Speaker 2: research to hopefully add some new relevant information current information
8:01
Speaker 2: about how that's going. Now we're just looking at the
8:04
Speaker 2: financial advisors. We're not also interviewing their clients. But that
8:08
Speaker 2: is probably my top.
8:10
Speaker 3: Number one thing. I'm super excited right now about cool.
8:14
Speaker 1: Thanks for all that detail. You know. I can't help
8:17
Speaker 1: but think when you're talking about these surveys, is is
8:20
Speaker 1: the takeaway? And if I'm a financial advisor seeing the
8:24
Speaker 1: results of this work, I would want to know a
8:30
Speaker 1: you know, am I in the minority if I'm not
8:31
Speaker 1: bringing it up? And if I'm in the majority, what's
8:35
Speaker 1: that all about? But I really am thinking about what
8:37
Speaker 1: you said around best in class, the idea that which
8:41
Speaker 1: calls back to the Fidelity survey from a while ago.
8:45
Speaker 1: The best in class was like, we talk about charitable
8:47
Speaker 1: giving and we make about six times the amount of
8:50
Speaker 1: money that others who don't talk about charitable giving do. So,
8:53
Speaker 1: in other words, it's good for our business, it's good
8:56
Speaker 1: for the client. The client gives us more money, there's
8:59
Speaker 1: more money going out the community for charitable purposes. Like
9:02
Speaker 1: what's not delay? Right? Everything works, yes.
9:04
Speaker 2: And some things I'm anticipating finding now. The research is
9:09
Speaker 2: still ongoing, so these are not firm final conclusions, but
9:13
Speaker 2: I anticipate we will see that many of these best
9:18
Speaker 2: in class advisors are not motivated by charging basis points
9:24
Speaker 2: on these donor advised fund accounts, and they firmly do
9:28
Speaker 2: believe that this is good for business. It's not even
9:31
Speaker 2: a question. They would never think about not having this
9:34
Speaker 2: be an essential part of their practice. One of the
9:39
Speaker 2: other things that I see some of these best in
9:42
Speaker 2: class advisors do.
9:43
Speaker 3: They talk about values from day one.
9:46
Speaker 2: They might not be building charitable mission statements for their clients,
9:50
Speaker 2: but they are always from the beginning talking about what's
9:53
Speaker 2: important to you, Why does this matter. They're having those
9:57
Speaker 2: touchy feely kinds of conversations that enable clients to open up,
10:04
Speaker 2: to think more deeply, to go beyond just tax planning strategies.
10:09
Speaker 3: Right.
10:09
Speaker 2: That also enables the advisor to feel more connected, get
10:13
Speaker 2: to know their clients better, to be really in that
10:16
Speaker 2: trusted inner circle of important people in that client's world.
10:21
Speaker 2: Builds those strong relationships, which is so much what financial
10:25
Speaker 2: planning is about. Obviously you have to be strong technically,
10:29
Speaker 2: but so much of it is managing emotions and counseling
10:34
Speaker 2: and all these other pieces that the most successful advisors
10:38
Speaker 2: are extremely effective at.
10:40
Speaker 3: That side of their job as well.
10:43
Speaker 2: Those are ones that are maybe in a bit of
10:45
Speaker 2: a better position to have these kinds of conversations around
10:48
Speaker 2: values and legacy and planning for the next generation and
10:53
Speaker 2: giving back things like that.
10:55
Speaker 1: Yeah, that's that would be an amazing takeaway I think
10:59
Speaker 1: for anybody to see that the best in class, this
11:02
Speaker 1: is what they do. They work on a multiple levels.
11:06
Speaker 1: But the takeaway is that maybe these advisors who are
11:09
Speaker 1: learning about this, you know, you can do it too,
11:11
Speaker 1: but a few tweaks to your own practice, you could
11:13
Speaker 1: also be leaning into this and making it more robust
11:16
Speaker 1: rather than it being like, oh, you know, I bump
11:18
Speaker 1: into charitable giving once in a while, or if the
11:21
Speaker 1: client brings it up, as you say, But it's not
11:23
Speaker 1: necessarily part of their approach. When they're regularly, as you'd said,
11:29
Speaker 1: talking about this multiple times a year and incorporating it
11:32
Speaker 1: into conversations both technically and non technically, it's just it's
11:36
Speaker 1: part of the way their clients operate, and they're responding
11:40
Speaker 1: to that and respecting that. And by the way, guess what,
11:43
Speaker 1: they're identifying all these other people who are doing it.
11:45
Speaker 1: It doesn't feel like it's by chance.
11:47
Speaker 3: Yeah, right, for sure, for sure.
11:50
Speaker 1: Yeah, Wow, that's great. So anything else. What are some
11:53
Speaker 1: other things that you're excited about right now?
11:56
Speaker 2: So on my travels this fall, I learned about a
12:01
Speaker 2: new group and I don't even know what to call them.
12:03
Speaker 2: Are they a group, an organization, a membership consortium. I'm
12:08
Speaker 2: not certain they quite have a formal entity yet, but
12:13
Speaker 2: they are building a formal entity and it's called the
12:15
Speaker 2: Net Positive Consortium. I don't know if you or any
12:19
Speaker 2: of your listeners have heard of this. I think it's
12:22
Speaker 2: so pretty under the radar. So I learned about this
12:25
Speaker 2: group when I was in New York for the Wealthies
12:27
Speaker 2: in September, and this group won one of the awards
12:33
Speaker 2: for I forget the exact designation, but it is a
12:37
Speaker 2: network of financial advisors who from day one fundamentally believe
12:45
Speaker 2: that part of their job as a business owner running
12:49
Speaker 2: a practice, having clients, part of their responsibility is giving
12:56
Speaker 2: back its social responsibility, environmental response ability, governance responsibility, but
13:03
Speaker 2: in all of its forms.
13:04
Speaker 3: And so I'm still trying to figure out the best
13:07
Speaker 3: way to describe it.
13:08
Speaker 2: But some of these advisors have looked at their own
13:13
Speaker 2: practice and they provide volunteer hours for their employees right
13:17
Speaker 2: or they have a donor advised fund for the firm,
13:21
Speaker 2: or they have programs to engage the next generation of
13:28
Speaker 2: financial advisors, the young folks who are coming into the
13:30
Speaker 2: profession in ways that our values aligned, which is what
13:34
Speaker 2: a lot of that next gen is looking for, and
13:37
Speaker 2: providing them with leadership opportunities that align with their values.
13:41
Speaker 2: So I don't mean this just in terms of charitable
13:44
Speaker 2: planning for your clients, but looking at your business as
13:47
Speaker 2: a whole, how can we leave the world a better place?
13:50
Speaker 2: That I think is the net positive part of this.
13:53
Speaker 2: Anything I do in this world, whether it's for my employees,
13:55
Speaker 2: for my clients, for my firm, for my community, I
13:59
Speaker 2: want to leave it in a net positive way.
14:02
Speaker 3: I want to give more than I get. And I
14:05
Speaker 3: just love this.
14:06
Speaker 2: And so there are a few individuals, a few firms
14:10
Speaker 2: that are part of that group. I think, again, they're
14:13
Speaker 2: still getting organized, but I see so much potential because honestly,
14:18
Speaker 2: they tend to be few and far between.
14:20
Speaker 3: So some of these folks.
14:21
Speaker 2: Have found each other and I'm hoping to get more
14:25
Speaker 2: involved to bring more advisors in because through my work,
14:30
Speaker 2: thinking about all the individuals I interviewed from my focus groups.
14:33
Speaker 3: You know, in August. They would be fantastic candidates to be.
14:37
Speaker 2: Part of this, right they all are fully on board
14:40
Speaker 2: with this mentality of giving is better than receiving and
14:44
Speaker 2: how can we, you know, leave more good in the
14:47
Speaker 2: world than we take from it? Again, whatever that means
14:50
Speaker 2: to you. Of course, part of that is a thoughtful,
14:54
Speaker 2: charitable planning for your clients, but again it goes beyond.
14:57
Speaker 3: That for this particular group.
14:59
Speaker 2: So that's something I'm hopeful will continue to grow and
15:04
Speaker 2: see what other ways we can connect them. I think
15:07
Speaker 2: about advisors in fullanthropy wanting to connect them into our
15:10
Speaker 2: work there. There just there's so many opportunities to help
15:15
Speaker 2: amplify the work that they're doing.
15:17
Speaker 3: I think there's a lot of potential.
15:19
Speaker 1: It sounds like there's all that energy and they're going
15:22
Speaker 1: to need and probably want a lot of guidance because
15:26
Speaker 1: it's going to get appropriately complicated. I think, in other words,
15:29
Speaker 1: to say like, how do we do this well? Who
15:31
Speaker 1: can we learn from who's been doing good work out
15:34
Speaker 1: there already on the net positive side that they can
15:36
Speaker 1: use as role models, and maybe they'll need some technical
15:41
Speaker 1: guidance in some way, shape or form, so I can
15:43
Speaker 1: see what you're excited about it, because if they're coming
15:46
Speaker 1: to the table with all this potential and excitement and
15:49
Speaker 1: the right frame of mind, then it's just a matter
15:51
Speaker 1: of giving them what they need and figuring out how
15:54
Speaker 1: the universe can serve them. Right yeah, yeah, as they say,
15:58
Speaker 1: it's a what as they say, it's the phrase you
16:00
Speaker 1: can't push a rope. I mean, these are people that
16:02
Speaker 1: are the opposite. They're kind of like, let's go, let's
16:05
Speaker 1: you know, we're going to figure this out one way
16:07
Speaker 1: or the other. And then Aaron and Rick are like, sure, well,
16:09
Speaker 1: you know, we'll help you, Like, what can we do?
16:10
Speaker 1: Who can we introduce you to? What else do you
16:12
Speaker 1: need to know? Right?
16:13
Speaker 3: Totally, totally. Yeah.
16:15
Speaker 2: It's always better to be interconnected because there's somebody out
16:18
Speaker 2: there who can help you achieve your goals whatever they are.
16:21
Speaker 3: Yep.
16:21
Speaker 1: Yeah. And as you know, whether it's charitable giving or
16:25
Speaker 1: not charitable giving, they're experts out there who are constantly
16:28
Speaker 1: studying the best ways to do things. They're learning from
16:31
Speaker 1: other people, like they're learning too, even though they're experts.
16:34
Speaker 1: They're learning. So then they bring it to the people
16:35
Speaker 1: who aren't necessarily experts and say, here's what I've seen
16:39
Speaker 1: and these are current best practices, let's use those and again,
16:42
Speaker 1: who else should we know as far as other advisors
16:44
Speaker 1: to help guide the conversation. So one way or the other,
16:46
Speaker 1: they're going to get that net positive effect with the
16:50
Speaker 1: best people in the country hopefully guiding them through it.
16:53
Speaker 1: And then what a great story to tell, right for sure? Yeah,
16:56
Speaker 1: for sure.
16:57
Speaker 3: So that's something else I'm watching and excited about.
17:00
Speaker 1: That's great. Any other things you're excited about or.
17:06
Speaker 3: That broadcast is over until next time.
17:11
Speaker 2: No, I would say they're not necessarily excited about. But
17:15
Speaker 2: just to other observations that I've been noticing, So just
17:19
Speaker 2: stick with the financial advisor space. It's really where I
17:24
Speaker 2: spend most of my time, and I'm we give team.
17:28
Speaker 2: We work with so many financial advisors all across the country.
17:33
Speaker 2: To those who are in the financial advising space, what
17:36
Speaker 2: I'm about to say is not surprising to you, but
17:38
Speaker 2: I think to those of us who aren't in that space,
17:41
Speaker 2: this is a very noteworthy trend.
17:43
Speaker 3: So the there are.
17:46
Speaker 2: Wirehouse broker dealer advisors, there are area advisors. The distinction
17:50
Speaker 2: is wirehouse broker dealers there at places like Northwestern Mutual,
17:54
Speaker 2: Edward Jones. You know Morgan Stanley, like those different large,
17:59
Speaker 2: large sort of financial institutions.
18:02
Speaker 3: And then there are rias.
18:03
Speaker 2: Which are the registered investment advisors. They're the independent financial
18:07
Speaker 2: advisors for an individual client. You don't necessarily know the difference,
18:12
Speaker 2: but they are regulated differently, okay, which has implications for
18:19
Speaker 2: my work in some cases.
18:20
Speaker 3: But so I'm familiar with this distinction.
18:23
Speaker 1: Well, is there a fiduciary piece to that as well?
18:26
Speaker 1: I was going to when I think of ri as
18:27
Speaker 1: and broker dealers, I think the the rias have a
18:31
Speaker 1: fiduciary responsibility. The broker dealers don't as much. Or is
18:34
Speaker 1: that too broad a brush.
18:36
Speaker 3: I've not thought of it in that way, so I'm
18:39
Speaker 3: not sure, Okay.
18:41
Speaker 2: The main things, like, when I think about the distinctions
18:44
Speaker 2: between them, the ones that stand out for me have
18:48
Speaker 2: to do mostly with what they can do. So like
18:52
Speaker 2: an RIA has much more ability to provide multiple types
18:59
Speaker 2: of services for their clients. They can pay for things
19:01
Speaker 2: for their clients. It is and I don't mean this
19:05
Speaker 2: in a negative way, but it's less strictly regulated, still
19:09
Speaker 2: highly regulated space. There's all there are a lot of
19:12
Speaker 2: oversight because this is people's money. But the rias have
19:16
Speaker 2: more flexibility to do much more in house, use different
19:21
Speaker 2: software and systems. Like, it's just differently regulated. The broker
19:25
Speaker 2: dealers they can't pay for things for their clients in
19:29
Speaker 2: the same way. They are just more restrictions. Again, from
19:32
Speaker 2: a client standpoint, it probably doesn't feel particularly different as
19:36
Speaker 2: an experience, I'll you know, probably, but there just are
19:41
Speaker 2: some rules that regulate those two segments differently. So as
19:46
Speaker 2: a result, from the eighties nineties onward, the RIA space
19:53
Speaker 2: has really grown and many advisors I see peeling off
19:58
Speaker 2: of wirehouse broker dealers leaving to set up their own
20:02
Speaker 2: RIA or to join an RIA, bringing their book of
20:06
Speaker 2: business with them and getting really big payouts to do so.
20:12
Speaker 3: So the big trend that I'm.
20:13
Speaker 2: Seeing not only that, but within the RIA space itself
20:17
Speaker 2: so much consolidation and like venture backed money, just rias
20:24
Speaker 2: eating up our other rias and becoming part of much
20:29
Speaker 2: bigger entities. So lots of the smaller local rias selling
20:37
Speaker 2: their book of business into the larger entity for any
20:41
Speaker 2: number of reasons. But I'm seeing so much consolidation in
20:45
Speaker 2: the RIA space, I don't as much see the one
20:49
Speaker 2: off spinoffs that still happens, and I actually talked to an.
20:53
Speaker 3: Advisor just this week who did just that. She had
20:56
Speaker 3: been with.
20:58
Speaker 2: A different firm and saw a gap in the marketplace.
21:02
Speaker 2: She saw so many clients who were not who were
21:08
Speaker 2: next gen younger donor younger clients not being as well
21:12
Speaker 2: served or catered to in the financial advisor space.
21:16
Speaker 3: So now she has started her own firm, her own RIA, to.
21:20
Speaker 2: Really work with this segment. So sometimes I'll see that,
21:24
Speaker 2: but truly the big trend is just this larger arias
21:29
Speaker 2: eating up the smaller ones and this consolidation so much
21:32
Speaker 2: as that of that is happening in the space right now.
21:35
Speaker 1: Wow, I've seen a variation on what you're talking about.
21:39
Speaker 1: I've seen a company who, let's just say, you know,
21:44
Speaker 1: it's an RIA who is identifying other private practices within
21:49
Speaker 1: that same company, and they are buying those practices up,
21:54
Speaker 1: so like, for example, one firm would buy another, and
21:57
Speaker 1: another and another, so they're going across the country buying
22:00
Speaker 1: up private practices essentially within their own company that are
22:06
Speaker 1: doing business sometimes under like a slightly different name, but
22:09
Speaker 1: it's like, you know, it's the such and such wealth
22:13
Speaker 1: advisory firm, but really it's a well known firm that's
22:17
Speaker 1: powering them, you know. But anyway, I've seen that where
22:20
Speaker 1: they're just buying this practice, usually from retiring advisors. They're
22:25
Speaker 1: leaving the practice, and who are they going to sell
22:27
Speaker 1: it to? Might as well sell it to somebody in
22:28
Speaker 1: my own company, So I do that, and then some
22:31
Speaker 1: of these firms are getting really really big, I mean
22:34
Speaker 1: billions of dollars because they just keep buying up these
22:37
Speaker 1: smaller and smaller practices until they're have this national presence
22:42
Speaker 1: one firm. And so again, not quite what you're describing,
22:46
Speaker 1: but I've seen that a trend within a company.
22:48
Speaker 2: Okay, yeah, I see that too, Okay, for sure, for sure, Yeah, yeah,
22:54
Speaker 2: I mean I think there's a big question of efficiencies, right,
22:58
Speaker 2: you know, if you have systems and place, you can
23:01
Speaker 2: often serve more with the same systems. That's one consideration.
23:05
Speaker 2: But there's also just a lot of money to be
23:08
Speaker 2: made in the managing money space. Yeah, and I think
23:12
Speaker 2: just a lot of people who in the business world
23:15
Speaker 2: are eyeing this space as a lot of potential for
23:18
Speaker 2: growth and upside, and so just see a lot of
23:22
Speaker 2: this consolidation happening.
23:23
Speaker 1: Well, I would like to think too that in my
23:28
Speaker 1: Pollyanna point of view in maybe years as well, is
23:30
Speaker 1: that they would also continue to round out the services
23:32
Speaker 1: they provide, like philanthropic services. And so I had to say,
23:35
Speaker 1: not only are we consolidating and becoming more efficient and
23:38
Speaker 1: making more money, but we're also trying to appeal to
23:42
Speaker 1: all the different services that we can offer to our clients,
23:46
Speaker 1: including philanthropic services and more maybe business valuation services or
23:51
Speaker 1: what have you, like, anything that just feels like it's
23:53
Speaker 1: a three hundred and sixty degree offering for clients because
23:56
Speaker 1: you have the scale and the capacity to be able
23:58
Speaker 1: to do that, and maybe you are also concerned about
24:02
Speaker 1: being competitive against your peers, and therefore you know what's
24:06
Speaker 1: our competitive edge? Right?
24:08
Speaker 3: Yeah?
24:09
Speaker 2: I am seeing that, and many of these firms are
24:12
Speaker 2: building out their suite of services, They have partnerships, they
24:15
Speaker 2: on board vendors of different types, and I am seeing
24:20
Speaker 2: many advisors more than a few years ago realizing it's
24:25
Speaker 2: not too hard to make a referral to the right group,
24:28
Speaker 2: and once they do and they see how it works,
24:30
Speaker 2: so like this was fantastic. We can do this again,
24:33
Speaker 2: but it's sometimes hard to do it the first time.
24:35
Speaker 2: When how do I position this and how do I
24:38
Speaker 2: mention this and is the client going to understand?
24:41
Speaker 3: And as it doesn't add value, we don't know what
24:43
Speaker 3: this is like.
24:43
Speaker 2: So I am seeing more of that, you know, warm
24:49
Speaker 2: handoff that is coming more easily, I think to some advisors,
24:53
Speaker 2: which is great.
24:54
Speaker 1: Yeah, that's good. So interesting to hear what you're seeing
24:58
Speaker 1: like and just I'm sure listeners also a probably comparing
25:01
Speaker 1: notes and saying I'm kind of seeing that too, and
25:03
Speaker 1: it's good to validate that against what Aaron's saying or
25:06
Speaker 1: what we'k's seeing. And because it's important to track on
25:09
Speaker 1: these trends like where will it go, what does it mean?
25:12
Speaker 1: How would affect clients, how it'll affect the business, how
25:15
Speaker 1: for us, how will it affect philanthropy?
25:19
Speaker 2: Yeah, and as an extension of financial advisors, we mentioned dafts,
25:23
Speaker 2: but thinking about the DAFT sponsors specifically, I am seeing
25:29
Speaker 2: awesome experimentation from DAFT sponsors in that space, and many
25:33
Speaker 2: of them are trying to create more partnerships to provide
25:39
Speaker 2: some philanthropic advising to DAFT holders. Still some not quite
25:45
Speaker 2: moving into that space yet, but I do see some
25:49
Speaker 2: good momentum and positive direction of DAFT sponsors realizing you know,
25:56
Speaker 2: this is a service.
25:57
Speaker 3: This is a value add they can.
25:58
Speaker 2: Offer to their clients and the firms that custodian with
26:03
Speaker 2: their DAFT sponsors and those those those financial firms, it is.
26:07
Speaker 3: It's a value add.
26:09
Speaker 1: Yeah, totally one. All right, we're gonna switch gears here.
26:13
Speaker 1: I want to ask you what you're not excited about.
26:17
Speaker 1: What's frustrating you right now?
26:19
Speaker 4: After saying all of those everything, all the everything's about, Oh,
26:24
Speaker 4: good job advisors, good.
26:25
Speaker 3: Job DAFT sponsors, still still the majority.
26:29
Speaker 4: The majority of advisors really aren't doing a lot of
26:32
Speaker 4: charitable planning with their clients. And it's shocking to me
26:36
Speaker 4: how many advisors, maybe best case scenario, have one or
26:42
Speaker 4: two clients with a DAFT. Now, obviously like your book
26:45
Speaker 4: of business, if you're working with some younger folks, newer
26:48
Speaker 4: they're building their wealth. Fine, But there are a lot
26:52
Speaker 4: of advisors out there with, you know, fairly well to
26:57
Speaker 4: do clients and just they still don't have a lot
27:01
Speaker 4: of dafts for their clients. And I just see that
27:04
Speaker 4: as a big missed opportunity. And in many cases they
27:10
Speaker 4: have those because their clients came to them with a DApp.
27:13
Speaker 2: I came over as a client with a DAFF already,
27:16
Speaker 2: and it wasn't as if the advisor had set that
27:18
Speaker 2: up in the first place. I think in general, things
27:21
Speaker 2: are moving in the right direction, but we've not reached
27:25
Speaker 2: full advisor adoption yet adoption levels, you know.
27:29
Speaker 1: Yeah, that's an interesting point where you're making that the
27:32
Speaker 1: donor advised fund holders are thrusting themselves onto their advisor
27:37
Speaker 1: and saying, I have the staff, like what should I
27:39
Speaker 1: do with it? Or And actually I might have spoken
27:42
Speaker 1: to this before when we talked last time, but I
27:45
Speaker 1: went to a I went to a conference in Huntington Beach, California,
27:51
Speaker 1: earlier this year. It's called the future Proof Festival, and
27:56
Speaker 1: one of the things I kept hearing was, yeah, a
27:59
Speaker 1: lot of our clients are starting to become more interested
28:02
Speaker 1: in DAFs. But what I thought was interesting about that
28:04
Speaker 1: conversation was it wasn't like they were saying, Hi, we're
28:08
Speaker 1: leading the way. We're having this conversation with It's like, oh,
28:11
Speaker 1: my goodness, look at all the clients who are interested
28:13
Speaker 1: in dafts. Now what's going on with Yeah?
28:17
Speaker 3: Maybe I should know something about them.
28:18
Speaker 1: That was the move that I was getting from these advisors,
28:21
Speaker 1: like we really got to get up to speed one
28:23
Speaker 1: guy even said, I think I lost a client because
28:27
Speaker 1: they didn't know anything about donor advice funds. I think
28:30
Speaker 1: this guy walked away from me, and so that was
28:33
Speaker 1: his motivation. He goes, I don't want to have that
28:34
Speaker 1: happen to me again. So it's almost like it's almost
28:38
Speaker 1: like this reactive somewhat of a deficit mentality rather than
28:42
Speaker 1: an abundance mentality of like, let's go in and talk
28:44
Speaker 1: about these things and really thrust a lot of energy
28:47
Speaker 1: into the conversation. Make sure that the clients know that
28:50
Speaker 1: this is a valuable part of my relationship with them.
28:53
Speaker 1: We're going to round out the conversation with these It's
28:56
Speaker 1: more like, hey, the trend is, you know this is
29:00
Speaker 1: it's hot right now donor advice. And the thing is
29:02
Speaker 1: you and I both know they're going to continue to
29:04
Speaker 1: be hot. They're going to be They're going to people
29:07
Speaker 1: are going to continue to go to these advisors and say,
29:09
Speaker 1: what should I do? Should I be with this firm
29:11
Speaker 1: that firm? How how would I know which is the
29:14
Speaker 1: best donor advice fund sponsor for me? And if the
29:17
Speaker 1: if the advisors are like I don't know, I don't
29:19
Speaker 1: know how you would tell the difference. In fact, I
29:21
Speaker 1: got to get up to speed on how a donor
29:23
Speaker 1: advice from works at a basic level, never mind which
29:26
Speaker 1: one's the best for you. So so anyway, I think
29:28
Speaker 1: it's just back to that kind of sad commentary on
29:32
Speaker 1: here we are the clients are sort of forcing the
29:36
Speaker 1: conversation and the advisors are reacting to it.
29:39
Speaker 3: Okay, Two anecdotes based on that.
29:41
Speaker 2: So one was donor reached out earlier this year. His
29:46
Speaker 2: mother had passed away. He received much of her estate
29:52
Speaker 2: and as well as her financial advisor sort of inherited
29:55
Speaker 2: all of the above, and he had been working in
29:59
Speaker 2: the nonprofit. It filled his whole life, and he was
30:01
Speaker 2: so thrilled to have what he thought was more than
30:05
Speaker 2: he would ever want, and really wanted to give the
30:08
Speaker 2: vast majority of it away. And he went to this
30:11
Speaker 2: financial advisor, his mother's financial advisor, and asked for support
30:17
Speaker 2: around figuring out the best way to structure this into
30:20
Speaker 2: a vehicle so he could, you know, plan how he
30:23
Speaker 2: wanted to.
30:23
Speaker 3: Give it away.
30:24
Speaker 2: And the advisor basically sat in his face and said,
30:28
Speaker 2: that's a terrible idea.
30:29
Speaker 3: Why would you do that?
30:30
Speaker 2: And he was, I mean, clearly not aligned at all
30:33
Speaker 2: with what the client's wishes were and said that this
30:36
Speaker 2: is a terrible idea and you shouldn't do this, and
30:39
Speaker 2: so it totally turned off the donor the client who
30:43
Speaker 2: then immediately started interviewing new financial advisors because then they
30:48
Speaker 2: lost that book of business and he's moved on to
30:50
Speaker 2: an advisor who will help support him and how he
30:54
Speaker 2: wants to give his money away, it's his choice. And
30:57
Speaker 2: so that's just one story or any advisors out there,
31:02
Speaker 2: make sure that you're supporting your clients, not the other
31:05
Speaker 2: way around. The other thing that I've seen a number
31:10
Speaker 2: of times now donors coming to us and wanting to.
31:14
Speaker 3: Work with us and.
31:17
Speaker 2: Setting up a DAFT either for the first time or
31:20
Speaker 2: moving their money from one DAFT to another with a
31:24
Speaker 2: DAFT sponsor that we have a partnership with, so that
31:27
Speaker 2: they can access our advising through that platform.
31:32
Speaker 3: And people are happy to move and switch dafts.
31:35
Speaker 2: If your daft's not offering advising with us, then they
31:39
Speaker 2: are real happy to move to another DAFT.
31:41
Speaker 3: It's not too hard to open that up.
31:43
Speaker 2: And if they're choosing between dafts, they will often choose
31:47
Speaker 2: a DAFT that we have a relationship with, so they
31:49
Speaker 2: can access this kind of advising. So speaking back to that,
31:53
Speaker 2: the daft sponsor like, get with the program. This is
31:56
Speaker 2: where the field's moving. You know, being able to offer
31:59
Speaker 2: this is a had aitive advantage.
32:01
Speaker 1: Yeah. I think both of the stories you just told
32:04
Speaker 1: were about client choice, client decisions, and if you're blocking
32:09
Speaker 1: those or not offering these options for them, they're going
32:11
Speaker 1: to probably move on to somebody who does. As soon
32:13
Speaker 1: as they know about those options being available to them,
32:16
Speaker 1: they're going to move on. I have I have an
32:19
Speaker 1: anecdote that you reminded me of from a This was
32:23
Speaker 1: from a community foundation, and the community foundation was telling
32:26
Speaker 1: stories about how they had heard and I think that
32:30
Speaker 1: they told me it was four times they'd heard this
32:32
Speaker 1: happening where the client would go to the advisor and say,
32:36
Speaker 1: I would like to do this thing philanthropically, and the
32:39
Speaker 1: advisor wouldn't say what you said. They wouldn't say it's
32:43
Speaker 1: a bad idea. They said, no, you can't do that,
32:46
Speaker 1: like they're the parent and the clients the child. No
32:49
Speaker 1: you're not allowed. You must stay in your room.
32:51
Speaker 2: You know.
32:51
Speaker 1: It was kind of like you, you know, you must
32:53
Speaker 1: say for retirement, you you must preserve your money for
32:56
Speaker 1: and so the client in these situations, it was. It
32:59
Speaker 1: was amazing because clients didn't challenge it. They go, my
33:02
Speaker 1: advisor says, I can't do it. My advisor said, I'm
33:04
Speaker 1: not allowed to do it. My advisor said, And so
33:07
Speaker 1: the person from the Community Foundations like, you're the boss
33:11
Speaker 1: of your money. I mean, your advisor is guiding you,
33:15
Speaker 1: but you're they're not your parent. You know they're not
33:19
Speaker 1: you know, you're It was just the most unusual conversation.
33:24
Speaker 1: So the Community Foundations like, we got to figure out
33:26
Speaker 1: how to get in front of this because if they
33:29
Speaker 1: just give this hard, stop hard no to their clients, boy,
33:33
Speaker 1: that is that'd suend a weird message, which is, well,
33:35
Speaker 1: when will it be okay for your client to approach
33:38
Speaker 1: the conversation how much money subjectively does your advisor feel
33:42
Speaker 1: like you need to have before they're going to allow
33:44
Speaker 1: you to give money away? So it was but I mean,
33:47
Speaker 1: I'm just it made me stop and think about how
33:50
Speaker 1: many times in this country do advisors say this is
33:54
Speaker 1: a definitive no and the client goes, Okay, that's what
33:59
Speaker 1: I'm hiring you for to give me those guardrails. But
34:02
Speaker 1: then I think those aren't necessarily good guardrails.
34:05
Speaker 3: Yeah. No, that's another great story, another great example.
34:11
Speaker 2: Yeah.
34:12
Speaker 1: Yeah, yeah, that's what I have for you. Rick, Well, jeez,
34:16
Speaker 1: I hate to end on. I'm frustrated. Yeah no, but
34:19
Speaker 1: I mean these are yeah, these are all observations. Yeah,
34:22
Speaker 1: these are everything. We're seeing, our trends and ideas, and
34:25
Speaker 1: hopefully the listeners are listening to this and saying, Okay,
34:28
Speaker 1: what can I do with that? Or is there something
34:30
Speaker 1: I can do to help control that narrative or move
34:33
Speaker 1: things in a more of a positive direction. Instead of
34:35
Speaker 1: feeling like they're either ignorant of certain things or blocking
34:39
Speaker 1: certain things, they're more embracing the idea that the clients
34:41
Speaker 1: are looking for these things, and if you want to
34:43
Speaker 1: grow and make your business viable and please your clients
34:46
Speaker 1: and grow with them, then you'll move in these directions. Otherwise,
34:51
Speaker 1: you know, the train may leave the station without you,
34:53
Speaker 1: and and then you know a few years you'll go.
34:55
Speaker 1: You know, and I probably should have done these things
34:57
Speaker 1: as an advisor. I should have been been more proactive
35:00
Speaker 1: about this, because now the trend is very strong, and
35:05
Speaker 1: I feel like I could have been building the infrastructure
35:07
Speaker 1: of my business and leaning into this rather than feeling
35:09
Speaker 1: like I'm running to catch up, right.
35:11
Speaker 2: That's right, start building it today. It's not too late,
35:14
Speaker 2: but someday it might be.
35:15
Speaker 1: So that's right. Yeah, it's it's it's a say the yeah.
35:20
Speaker 1: Educating early adoption, I think is the word sometimes people use,
35:23
Speaker 1: like the early adopters get it. Then you see the
35:26
Speaker 1: next group of people come in, and then you have
35:29
Speaker 1: these late adopters who wish they had done something but
35:31
Speaker 1: they didn't. So yeah, yeah, well, Aaron, always a pleasure.
35:37
Speaker 1: Thank you for coming back for part two of our
35:38
Speaker 1: conversation again, just for those who may not have heard
35:42
Speaker 1: part one yet, hopefully they can go back and listen
35:44
Speaker 1: to it. But how would people reach you?
35:47
Speaker 3: All right?
35:48
Speaker 2: So feel free to email me Aaron E R I
35:51
Speaker 2: n N at the gifteam dot com or find me
35:56
Speaker 2: on LinkedIn. I'm pretty active there. You can just search
35:59
Speaker 2: for my name E R I N N. And Andrews
36:03
Speaker 2: is my last name.
36:04
Speaker 3: A N D R E w S. Check us out
36:07
Speaker 3: at the giveteam dot com and feel free to reach
36:10
Speaker 3: out and connect with me.
36:12
Speaker 1: Yes, we will hope that all these listeners will reach
36:16
Speaker 1: out and say, erin, please guide me in the right direction.
36:20
Speaker 1: What should I know? What should I not you know,
36:21
Speaker 1: what should I not be doing? But thank you for
36:23
Speaker 1: coming on and sort of ending the year with these
36:26
Speaker 1: trends and observations. And you're always welcome to come back
36:29
Speaker 1: and talk about what else you're seeing in twenty twenty
36:32
Speaker 1: six because it's super informative. And as I said when
36:36
Speaker 1: we started today, people have already made comments about the
36:40
Speaker 1: part one and thought it was really insightful for them.
36:42
Speaker 1: So thank you for bringing that insight.
36:45
Speaker 3: Thanks Rick, so appreciate it. Good to say you take
36:48
Speaker 3: care everyone.
36:49
Speaker 1: All right, See you next time.
36:50
Speaker 3: See YEA.
36:54
Speaker 1: That wraps up today's conversation with Aaron Andrews. Her perspective
36:58
Speaker 1: reminds us that generosity is isn't just a client preference.
37:01
Speaker 1: It's a strategic advantage for advisors, a meaningful outlet for donors,
37:06
Speaker 1: and a powerful force for community good. Here are three
37:10
Speaker 1: key takeaways from our discussion. First, leading advisors don't wait
37:14
Speaker 1: for clients to bring up philanthropy. They make it a
37:17
Speaker 1: regular part of meaningful, values based conversations. Second, donor advise
37:22
Speaker 1: funds and other charitable tools aren't just financial products. They're
37:26
Speaker 1: gateways to deeper relationships, retention and impact. And Third, advisors
37:32
Speaker 1: who invest now in learning partnerships and best practices will
37:36
Speaker 1: be better positioned for a future where generosity is expected,
37:40
Speaker 1: not optional. Thanks for listening to Money to Give. If
37:44
Speaker 1: this conversation resonated with you, please leave a review on
37:47
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37:51
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37:55
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37:59
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38:03
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38:07
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38:16
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38:31
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38:38
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38:44
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38:47
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