Independent registered investment advisors increasingly considering charitable planning as part of strategic advice mix for clients
Public Company Information:
SAN FRANCISCO--(BUSINESS WIRE)--Schwab Charitable, one of the nation's leading donor-advised fund organizations, reported strong results for Fiscal Year 2013, reflecting growing interest by individuals, families and their independent registered investment advisors (RIAs) in becoming more strategic about when and how they give. As of June 30, 2013, Schwab Charitable assets under management were $4.8 billion and grants to charities for the fiscal year totaled more than $600 million, 55% and 12% growth from the previous year, respectively. The organization also doubled its new accounts in fiscal year 2013, underscoring the popularity of donor-advised funds as part of holistic financial and charitable planning.
“There is a virtually limitless opportunity to help individuals and families make a significant philanthropic impact in the world around them, and we are committed to providing them and their RIAs with ways to make giving easy, impactful and sustainable,” said Kim Laughton, president of Schwab Charitable. “Our results this past fiscal year are heartening as they point to an upward trajectory in charitable giving. As we look ahead we are confident this trajectory will continue. A robust stock market, higher tax rates and uncertainty around itemized deductions all encourage individuals and families to consider using a donor-advised fund to support their favorite philanthropic causes, while reducing their tax bills.”
A donor-advised fund allows investors to contribute cash and/or a variety of appreciated assets1 to a charitable account to realize the greatest possible tax benefits and then support their favorite charities over time. Serving a wide range of philanthropic investors, Schwab Charitable’s account sizes range from $5,000 to more than $600 million.
Majority of RIAs offer charitable planning - deepening client relationships and bolstering business growth
According to the 2013 RIA Benchmarking Study from Charles Schwab2, released last week, 54% of all firms with assets under management (AUM) of $25 million or more currently offer charitable planning services and of those, 85% indicated that at least some of their clients are using those services, and 34% are considering offering charitable planning in the future. For those firms with an AUM between $50 million and $100 million, 50% are considering offering charitable planning in the next 12 -18 months.
Sixty percent (60%) of the Best-Managed Firms3 in the study are currently already offering charitable planning and an additional 30% are considering offering charitable planning.
“Charitable giving is a very personal and often emotionally-driven decision process, and it’s wonderful to see so many RIA/client relationships that are deep enough to discuss the charitable causes and organizations that matter to an individual or family,” said Laughton. “RIAs who help clients think about their philanthropic goals with the same level of purpose that they think about retirement, college savings or even insurance goals are providing a differentiated level of advice and client service that can translate into real business results and a new standard of best practice.”
About Schwab Charitable
Created as a national donor-advised fund with a mission to increase charitable giving nationwide, Schwab Charitable has received over $8 billion in contributions and has facilitated over $3.6 billion in grants to charities on behalf of its donors since inception. Serving a wide range of philanthropic investors, account sizes range from $5,000 to more than $600 million. Schwab Charitable has been a pioneer in enabling RIAs to manage the investments of donor-advised accounts and remains a leading provider of such professionally managed accounts.4 Schwab Charitable also offers a private foundation conversion service for private foundations considering donor-advised funds as a complementary or alternative charitable vehicle. For more information, visit schwabcharitable.org.
A donor's ability to claim itemized deductions may be subject to further limitations depending upon the donor's specific tax situation and donors should consult their tax advisors. Schwab Charitable does not provide specific individualized legal or tax advice. Please consult a qualified legal or tax advisor where such advice is necessary or appropriate.
Schwab Charitable is the name used for the combined programs and services of Schwab Charitable Fund, an independent nonprofit organization. The Fund has entered into service agreements with certain affiliates of The Charles Schwab Corporation. (0713-5027)
1 Contributions of real estate, private equity or other non-cash assets are accepted via a charitable intermediary, with proceeds of your donation transferred to your donor-advised account upon liquidation. This intermediary considers donations on a case-by-case basis, and assets typically must be valued at $250,000 or more. Call the Fund for more information at 800-746-6216.
2 About the RIA Benchmarking Study
Schwab designed this study to capture insights in the RIA industry, based on survey responses from individual firms. The 2013 study provides information on topics such as asset and revenue growth, sources of new clients, products and pricing, staffing, marketing, technology, and financial performance.
Since the inception of the study in 2006, more than 2,500 firms have participated, with many repeat participants. A total of 1,025 advisory firms representing nearly half a trillion dollars in AUM that custody their assets with Schwab participated this year, making this the leading study in the RIA industry.
The RIA Benchmarking Study comprises self-reported data from advisory firms that custody their assets with Schwab. Participant firms represent various sizes and business models. They are categorized into 12 peer groups—6 wealth manager groups and 6 money manager groups, by AUM size.
The study is part of Schwab's Business Consulting Services, a practice management offering for RIAs. Grounded in the best practices of leading independent advisory firms, Business Consulting Services provides insight, guidance, tools, and resources to help you strategically manage and grow your firm.
Independent investment advisors are not owned, affiliated with or supervised by Schwab.
3 Best-Managed Firms are advisors in Schwab’s RIA Benchmarking Study who are in the top 20% of qualifying firms, ranked by productivity (2012 revenue per professional), profitability (2012 standardized operating margin), revenue growth (2009–2012 compound annual growth rate in revenue) and net asset growth (2012 growth from net asset flows).
4 Professionally-managed accounts are available only through independent investment advisors working with Schwab Advisor ServicesTM, a business segment of The Charles Schwab Corporation serving independent investment advisors and includes the custody, trading and support services of Charles Schwab & Co., Inc.. While donors may recommend an advisor, the Fund must approve the recommendation. Advisors must meet certain eligibility requirements and adhere to Fund fee and investment guidelines. You may request a copy of the investment guidelines by calling us at (800) 746-6216.