Planned Giving Officers & Financial Advisors

Finding common ground: Planned Giving Officers & Financial Advisors Presented by:

2012

William Sutton, Jr. Head of Philanthropic Services, US UBS

Section One

Why are Financials Service Firms “Into” Philanthropy

The Business of Philanthropic Services Why are Financial Services Firms “in” philanthropy

Change Firms

Designate Advisor

Wealth Transfer

90

53

6

percent

percent

Trillion

Evolving client needs…

…firms are moving beyond investment advice

98%

98%

Of clients give annually

Philanthropy is a top client priority

Advice ? No consistent source

2

Endowment & Foundation Services – The Opportunity Endowment & Foundation assets in the US

U.S. Market Opportunity

• $2.56 Trillion AUM and over 1,000,000 public charities • 64% of HNW clients serve on non-profit boards

Retirement Accounts

Cash Management

Securities Backed Lending

Business Opportunity

Endowments & Foundations

Charitable Trusts

Charitable Gift Annuity and Donor Advised Fund 3

Focus on more than asset management

4

UBS Philanthropic Services: a global presence We provide you with expertise and solutions to deliver positive change Philanthropic Team UBS commitment to philanthropy goes back many years. Our team covers over 30 dedicated experts globally and we look back at over 10 years of successful hands-on experience with our in-house foundation, engaging in over 70 countries worldwide.

Paris

Zurich / Geneva

New York Atlanta

Hong Kong

Singapore

Headquarters

Sydney

6 regional offices Projects & Initiatives UBS Optimus Foundation

5

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UBS Philanthropic Services: A Local and Global Presence Providing unique knowledge exchange, administration investment and peershare services UBS Philanthropic Services:

Recent UBS Philanthropy Events:

• Works with over 20,000 charities across the U.S. and thousands more globally1

• UBS Global Philanthropic Forums and Roundtables

• Serves 3,500 private foundations in the U.S. • Selected Best Global Philanthropy Services2 • Over $50 Billion Managed and Advised Philanthropic Assets in the U.S. alone

• Services for private foundations, donor advised funds, charitable trusts, endowments and foundations

1 2

National Center for Charitable Statistics Euromoney Private Banking Survey, 2012for the year 2011

• UBS Optimus Foundation • Next Generation: Philanthropy – Singapore, Zurich and New York • Visionaris Social Entrepreneurship Award in Latin America: UBS & Ashoka • UBS US Philanthropic Roundtables

• Q Series on Sustainable Investing • Mission Related Investing Roundtables • Family Office Forum • Coaching Roundtables: Customized training and peer sessions for Endowment and Foundation Leadership

1 Best Philanthropy Services in the World Euromoney 2012

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Benefits of Charitable Planning Charitable planning brings life to client’s values and supports the community, and also benefits financial advisors Uncover more assets

- Assessing a client’s charitable goals may uncover assets held away

Increase revenue

- Charitable planning may lead to solutions such as life insurance, donor advised funds and trust services

Build relationships across

- Conversations may lead to relationships with client’s heirs and their

multiple generations

friends who share their causes

Develop strong referral sources

- Establish productive relationships with your client’s other advisors

Insulate your client relationships

- Addressing charitable planning positions you to maintain control and

coordination over all aspects of your client’s financial life - Successfully helping clients address some of their most personal needs

enhances their trust and confidence in you

Source: UBS; From Planning to Action, Delivering Wealth Management Advice – Charitable Planning; 2012

7

Why are financial Services firms “in” Philanthropy The Lucky 9%

Talk About Planning Real Conversations

The Lucky 9%

Active Philanthropy

8

Section Two

The Landscape

Recent Charitable Trends

The Landscape Research - History •1990s: TPI’s series of professional advisor surveys •Financial Advisor philanthropic dialogue with clients: •intermittent •focused on estate planning not philanthropy goals •In 1999, Schervish and Havens document $41 trillion intergenerational asset shift

•By 2004, TPI reflects shift in advisor practices on talking about philanthropy with clients •80% discussed philanthropy with clients •38% said “very important” •75% said “good for business” •8% reported such discussions “generated revenue”

1

Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf

2

McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

10

Philanthropic Landscape: Recent History: Americans donated $298 Billion in 2011

Giving USA Foundation 2008

Section Three

The Pew Charitable Trust Survey of Financial Advisors

What are the top three concerns of your existing client base? Insight

Outliving assets and not having enough for retirement

Transferring wealth effectively and efficiently (i.e., multigenerational planning)

Volatile markets (i.e., short-term market problems and the economy)

Tax minimization

Asset preservation

Philanthropic effectiveness

Teaching heirs to use wealth responsibly

Bringing children into the family’s philanthropy

•

•

22

Recent Charitable Trends

What is the greatest challenge to addressing your client’s philanthropic needs? What do advisor’s need? •Lack of advisor expertise in philanthropic planning: “I need to learn the topic more.”

•Financial insecurity: “Market conditions have clients concerned that they will not have enough to support family needs over the long term.” •Lack of company-provided product: “My company does not have a donor-advised fund.” •Lack of client direction: “Most people have a vague idea of being charitable, but no clue what they really want to do.” •One advisor was clear that training was needed on the “softer skills.”

1

Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf

2

McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

23

Recent Charitable Trends

Addressing your client’s philanthropic needs

Dow at 14,000

“Education, Education Education”

Tools and Resources

Access to Philanthropy Experts

More forums to share experiences and exchange ideas

Deeper training in estate planning and immediate tax benefits

Discussion on philanthropic strategy – not selling a product

Turn key solutions

1

Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf

2

McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

24

Recent Charitable Trends

Survey Takeaway: Amplifying the Philanthropic Dialogue Philanthropy is being talked about more than ever within financial services firms and among advisors and their clients. 80% report that their firms discuss philanthropy as a client service more often 90% indicate that their firms are marketing philanthropic planning services.

More advisors are asking their clients about philanthropic planning interests 63% report that their clients are talking more about philanthropy 93% believe that the aging baby boomer population will create a greater need for philanthropic planning services 91% of advisors believe that being able to address philanthropic needs would help differentiate themselves in the eyes of existing and would-be clients

1

Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf

2

McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

25

Section Four

Practical Opportunities

Recent Charitable Trends

Selective Partnership The “Right” Advisor •10 plus years in the business •Serves on nonprofit boards •Practices “holistic wealth management” •Embraces financial planning •Open to partnership •They talk to (not through) the spouse/partner •They know which charities their clients support and why •Philanthropic Financial Planning

1

Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf

2

McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

27

Recent Charitable Trends

Understanding the Advisor Compensation and Competition: friction and frank conversations •Commission/Salary Bonus or Recognition •Donations, Wills and Trusts: Assets leave the firm •Overpromising Development Director •“Why would I ever introduce you to my best client” •It’s not you, it’s me

1

Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf

2

McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

28

Recent Charitable Trends

Understanding the Advisor, cont. Hurdles to charitable planning •Advisor and Comfort Discomfort •Perceived client disinterest •Speaking to the wrong client •Infrequent meetings/limited time •Short term relationships •Conflict avoidance: transactional planning is easier •Lack of competence

1

Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf

2

McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

29

Recent Charitable Trends

You might need to adapt Avoiding Friction and the new reality •Donor/Client life events vs. nonprofit fundraising schedule

•Bequests: Discuss with Advisors •Client and Advisor “control” – assets managed •Commercial Donor Advised Funds: Fidelity, Calvert/Impact, UBS, Comerica •Community Foundations: KC and Atlanta •Restricted endowment assets

1

Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf

2

McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

30

Philanthropic Conversation Charitable Giving: Who starts the conversation? Client Initiated

Advisor Initiated

Attorney

93%

7%

Accountant

90%

10%

Financial Advisor

80%

20%

Bank/Trust

68%

32%

Nonprofit

48%

52%

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Philanthropic Planning Nonprofit assistance: Help close the 80/20 gap

Marketing materials: tools for effective giving w/o overselling Include advisors in annual meetings to learn about mission plus educational updates re charitable planning Educational workshops Active Philanthropy

Financial Advisors

Concrete illustrations of donor success Issue based information about community needs and how effective local nonprofits are at addressing needs

32

Recent Charitable Trends

Opportunities •Understanding the win-win •Educating the Financial Advisor •Serving as the expert resource for the advisors’ clients

1

Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf

2

McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

33

Section Five

Continued Discussion