Missing piece of the puzzle

Missing piece of the puzzle


Helping people to align financial goals with personal values, including philanthropy, should be top of mind for financial advisers.

Helping people to align financial goals with personal values, including philanthropy, should be top of mind for financial advisers.


Conventional thinking in financial planning suggests that the financial planning process can be divided into four basic stages.

Firstly the adviser and client discuss financial goals and develop an investment plan to achieve them. Stage two involves taxation planning, where the adviser seeks to help the client maximise overall returns through tax-effective structures. Retirement income is discussed in stage three and a plan mapped out as to how to achieve it. And finally, stage four involves discussing estate planning, or in plain English looking at how to manage a client’s money and assets after death.

But for advisers wanting to look more holistically there is a fifth stage – one that is sadly often neglected to the detriment of the client; philanthropy. While it’s true that many Australians give charitable donations on a regular basis, it is far less common for structured philanthropy to be an intrinsic part of a financial plan.


Bringing up the notion of giving can be a challenging conversation to have, and many advisers assume that unless their clients bring it up themselves, they don’t really want to hear about it. This means that a discussion of the issue really only occurs at tax time, when the scramble for tax deductions begins.

But the reality is that clients may only be reluctant to talk about what they do for charity, not reluctant to contribute. In fact, research by the Queensland University of Technology (QUT) shows that only 40% of advisers are advised of their clients’ interest in philanthropy even though the percentage of clients interested and already giving is likely to be much higher.

So how should advisers go about starting the conversation?

Asking about whether clients already support particular charities is a good way to start, as is finding out whether there are causes they feel passionate about. It’s also important to realise that the benefits of philanthropy flow to more than just the charity. A relationship between an Adviseradviser and client that encompasses giving can be far stronger and more rewarding than one forged over a row of numbers in a spreadsheet.

As head of philanthropic services for Shadforth Financial Planning and a financial planner myself, I talk to clients regularly about the ways in which they can give back to the community. I am also a member of the Council of microfinance organisation Opportunity International Australia so I am in the fortunate position of seeing first-hand the benefits that charitable donations can bring.

One of the things that appeals about Opportunity International Australia is the sustainable nature of its model. Opportunity provides people living in poverty with the chance to transform their lives through the provision of small loans, empowering families to start a small business, earn a regular income and provide food, water, shelter and an education for their children. And because 97% of the loans are paid back and then lent out again, the support given by donors keeps working over time.

So my advice to advisers? Don’t be afraid to bring up the topic of charitable donations with clients as this is an important part of financial planning. Giving the best possible advice to clients means understanding as much as you can about your clients financial priorities and looking at their situation holistically.


About Kevin Bailey

Kevin Bailey is head of philanthropic services at Shadforth Financial Group. A certified financial planner and former director of the Financial Planning Association, Kevin has decades of experience in the financial advice sector and was awarded the FPA Distinguished Service Award in 2002.

In 1996 he founded The Money Managers which later became part of the SFG group. The Federal Government appointed Kevin to the National Advisory Committee on Ageing from 2001-2004.

Kevin also served as Honarary Consul General for East Timor between 2002 and 2013 and is a director of the Investment Advisory Board of the Sovereign Wealth Fund of East Timor.

Missing piece of the puzzle
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