Philanthropy training is a “significant growth opportunity” for advisers as young people are keen to contribute to good causes but are nott receiving advice on how best to invest.
Research from Pro Bono Economics found that, while there are around 230,000 people under 35 with net assets exceeding £100,000, roughly 110,000 of those may not be in contact with a financial or wealth adviser.
PBE argued that, in addition to unlocking large charitable donations, providing philanthropy support for young wealthy clients would be a “significant growth opportunity” for financial advisers.
Pro Bono Economics director of policy and communications, Nicole Sykes, argued that now is an “opportune moment” for financial advisers with the great wealth transfer and advised that the “time to act is now”.
“By championing philanthropy, advisers can ensure they remain relevant and tap into the significant good will of the generous generation,” she explained.
“Firms and advisers that do not currently offer philanthropy services or limit their philanthropic offerings to the ultra-wealthy risk being left behind by demographics, demand, and by governmental action.
“But by evolving and embracing the challenge they can attract the next generation of clients in a competitive market and contribute to a more giving, socially-conscious society.”
To address the issue, PBE brought together the Financial Conduct Authority, the Treasury, and the Department of Culture Media and Sport, as well as an alliance of accredited bodies, government entities, and philanthropy experts, to enhance philanthropy training for advisers.
The need for this to be addressed was underlined by the PBE’s research as it pointed out that an estimated £5.5tn is expected to be passed down to younger generations over the next 20 to 30 years.
Therefore, it advised that financial advisers and firms seeking to attract the business of the 230,000 under-35s who already possess net financial assets exceeding £100,000 will “need to adapt”.
Encouragingly, the research found 88 per cent of wealthy young people already donate to charity and PBE found that 90 per cent of those surveyed expressed a strong desire to have a positive societal impact with their money.
Therefore, with this generation giving more to charity than ever before, PBE stated that financial advisers will need to “tap into their philanthropic instincts”.
Additionally, while the younger generation is also more likely to seek financial advice, the research found that more than half of wealthy under-35s indicated they would be more likely to choose a financial adviser who offers philanthropy advice.
tom.dunstan@ft.com
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