Targeting Uniquely Successful Families with a Gifting Capacity Analysis
Oct 2, 2023
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Learn how a gifting capacity analysis can benefit wealthy families by addressing wealth transfer and philanthropic gifting decisions. Discover the importance of effective communication with centers of influence and presenting complicated ideas with the help of financial planning software. Find out how the analysis can reduce tension in wealthy families and open up new referral advocates for financial advisors.
Financial advisors can differentiate themselves by providing immediate, meaningful value without asking for anything in return, which resonates with Centers of Influence (COIs).
By focusing on a particular problem, such as a gifting capacity analysis, advisors can deliver an offer that is easy for COIs to understand and positively respond to.
Deep dives
The Importance of Behavioral Science in Referral Messaging
Financial advisors often make the mistake of assuming that Centers of Influence (COIs) will be open to referring clients based on a traditional advisor pitch. However, this approach overlooks the fundamental principles of human psychology and decision-making. COIs, such as CPAs and attorneys, are trained to avoid asymmetric risk and may hesitate to endorse a financial advisor without considering the potential consequences. A successful referral message takes into account the behavioral sciences and aims to eliminate costs, risks, and requirements for clients to make changes. By providing immediate, meaningful value without asking for anything in return, financial advisors can differentiate themselves and communicate their expertise in a way that resonates with COIs.
The Power of a Referable Message
To create a strong referable message, financial advisors need to identify the specific issues that will appeal to their desired clients and the COIs who can influence them. By focusing on a particular problem, such as a gifting capacity analysis, advisors can deliver an offer that is easy for COIs to understand and positively respond to. The key is to provide tremendous immediate value to the COI without any cost, risk, or requirement for the client to change anything. In this example, the gifting capacity analysis helps wealthy individuals navigate the tension between philanthropic interests, family legacies, and personal lifestyles. By leveraging financial planning software and scenario planning, advisors can provide tangible reports and analysis that resonate with CPAs and attorneys and showcase their competency.
Expanding the Reach of Referral Messaging
The potential for referral messaging extends beyond traditional COIs. Financial advisors can approach mission-driven organizations, such as nonprofit institutions, and offer solutions to their fundraising challenges. By demonstrating how a gifting capacity analysis can help these organizations address the uncertainty of major gift donations, advisors can forge impactful partnerships. This approach not only benefits the organization and the constituents who have the capacity to make major gifts, but also exposes the advisor to new clients and provides an opportunity to showcase their advanced level of expertise. By solving a fundamental problem without seeking immediate compensation, advisors can position themselves as trusted and competent professionals in the eyes of both potential clients and COIs.
Wealthy families often face significant decisions about the ultimate dispensation of their wealth. Uniquely successful clients typically want to transfer some of their wealth to the next generation or two. Many also wish to make philanthropic gifts during and after their lifetimes. Unfortunately, some people make these decisions without a clear sense of the impact that a gift would have on their own future financial security and, as a result, delay making meaningful gifts. Here, Scott and Ken show how an advanced financial planning tool can create a gifting capacity analysis to help families answer the question “How much can I afford to give?”
The information contained herein reflects the views of AllianceBernstein L.P. or its affiliates and sources it believes are reliable as of the date of this production. AllianceBernstein L.P. makes no representation or warranties concerning the accuracy of any data. There is no guarantee that any projection, forecast or opinion in this material will be realized. Past performance does not guarantee future results. The views expressed here may change at any time after the date of this publication. This video segment is for informational purposes only and does not constitute investment advice. AllianceBernstein L.P. does not provide tax, legal or accounting advice. It does not take an investor's personal investment objectives or financial situation into account; investors should discuss their individual circumstances with appropriate professionals before making any decisions. This information should not be construed as sales or marketing material or an offer or solicitation for the purchase or sale of any financial instrument, product or service sponsored by AB or its affiliates. References to specific securities are presented solely in the context of industry analysis and are not to be considered recommendations by AB. AB and its affiliates may have positions in, and may affect transactions in, the markets, industry sectors, and companies described herein.
It is important to note that not all Financial Advisors are consultants or investment managers; consulting and investment management are advisory activities, not brokerage activities, and are governed by different securities laws and also by different firm procedures and guidelines. For some clients, only brokerage functions can be performed for a client, unless the client utilizes one or more advisory products. Further, Financial Advisors must follow their firm’s internal policies and procedures with respect to certain activities (e.g., advisory, financial planning) or when dealing with certain types of clients (e.g., trusts, foundations). In addition, it is important to remember that any outside business activity including referral networks be conducted in accordance with your firm’s policies and procedures. Contact your branch manager and/or compliance department with any questions regarding your business practices, creating a value proposition or any other activities (including referral networks). It is important to remember that (i) all planning services must be completed in accordance with your firm’s internal policies and procedures; (ii) you may only use approved tools, software and forms in the performance of planning services; and (iii) only Financial Advisors who are properly licensed may engage in financial planning. For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
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