Over 38 years in financial services, I thought that learning the tools and techniques of charitable planning would lead my clients to take the necessary steps to implement the strategies that I recommended. But the truth is, I was a flop. I did a lot of talking, but nothing was happening. And why was this?
My plans were centered on strategies that focused on tax planning, retirement planning and commission generation. I had numerous misconceptions regarding the charitable marketplace, and rather than being the problem solver, I was actually the problem. I tell you this because "the smart man learns from his own mistakes, while the wise man learns from the mistakes of others." Allow me to share with you the errors of my ways.
Misconception #1: I thought wealth was synonymous with money.
When I pondered wealth, I had a preconceived idea that it was wrapped in dollar signs. I believed that wealth pertained to your assets and liabilities, your insurance, your last will and testament, your net worth. It was tangible. It could be calculated, graphed and charted.
This led my charitable planning to be very one dimensional. I merely focused on the numbers. My planning was black and white in nature. However, I have now come to the conclusion that wealth is not synonymous with money.
This revelation transformed my planning into living colors. By addressing one's intangible wealth (personal and social wealth), I began planning in 3 dimensions. With this expanded view of wealth, charitable planning took on greater significance.
Misconception #2: I didn't think clients had enough wealth to give away assets.
My clients are not the Rockefellers of the world; they are the millionaire next door. However, I was taught to believe that charitable planning was for the ultra-wealthy. My financial plans, created for "the masses," were void of charitable elements.
But my mistake was to downplay the value of individuals having a charitable component to their lives. By opening up myself to the benefits of charitable planning for all clients, I truly began to counsel the client's total wealth.
Misconception #3: I believed that clients would give it away after they made it.
My purpose as a financial planner was to help my clients become financially independent. Therefore, I was very protective of their assets in an effort to accumulate ample capital to provide for an inflation-adjusted standard of living that they could not outlive.
I believed that when my clients had "enough" they would then begin addressing charitable interests. My experience proved this to be untrue. Two important principles became apparent over the years. First, I was taking away the "joy of giving" from my clients by advocating ownership over stewardship. Second, if the principles of philanthropy were not established and nurtured during the wealth creation stage, clients did not develop these tendencies at wealth distribution.
In other words, in their later lives, clients developed deep pockets and short arms! I now realize that as a "total" wealth manager, it is part of my mission to help clients develop their social wealth through the use of philanthropy.
