Lack Of Information Stopping Financial Advisers Making The Most Of Tax-Efficient Giving

According to a MORI study commissioned by the Giving Campaign and released today, many financial advisers do not tell their clients about new tax-efficient methods of giving to charity. Key reasons include that they don't have enough information about these methods and they are reluctant to raise the subject with their clients.

The key findings are:

• 57% of the IFAs (independent financial advisers) and nearly half the stockbrokers surveyed never or hardly ever give such advice.
• Over 80% of stockbrokers said it was the client, not themselves who raised the issue of giving money to charity. Key reasons given for advisers' reluctance are to avoid embarrassing clients and because they believe clients' main concern is to maximise income.
• The most important constraint on giving advice, cited by three quarters of IFAs and nearly two thirds of stockbrokers, is a lack of information and training.
• However, three quarters of independent financial advisers and stockbrokers said the opportunity to do a good job for their clients provided an incentive to offer advice on tax efficient or planned giving.
• Financial advisers think the single most useful form of additional information would be user-friendly information to pass on to clients.

The survey, commissioned by The Giving Campaign in partnership with the Association of Independent Financial Advisers (AIFA) and the Association of Private Client Investment Managers and Stockbrokers (APCIMS), involved telephone interviews with financial advisers of all types and a web survey of independent financial advisers, stockbrokers and investment managers.

Amanda Delew, Director of the Giving Campaign, said:

"I think the research shows that we have a lot of work to do to ensure that financial advisers are equipped with the information and motivation to give advice on tax-efficient giving to their clients. UK charity tax reliefs are amongst the most generous in the world and we need to give everyone the chance to give money in the most effective way. Research suggests around 70% of people currently donate to charity, yet not enough are doing so tax efficiently. We are going to work with trade bodies and advisers of all kinds to put that right, producing the information needed by clients and the advisers themselves to make informed decisions on giving to charity."

Brian Mairs, Head of Information at APCIMS, welcomed the findings:

"What is clear from the survey is that financial advisers recognise the importance of tax-efficient ways of giving to charity in fostering a long term relationship with clients. We are always looking for ways to improve the service provided to clients, so the more knowledge advisers have about tax-efficient giving, the better."

Paul Smee, Director General of AIFA, said:

"This survey has confirmed that independent financial advisers are motivated by the ability to be able to deliver a high level of client service. IFAs recognise that being able to provide advice on tax-efficient ways of giving to charity should be an important part of their service and a way of fostering long-term relationships with their clients. IFAs now need access to the information which would enable them to do this and AIFA will be working with the Giving Campaign to help this come about."

A summary report of the research is available from the Giving Campaign on 020-7930 3154 or can be downloaded at www.givingcampaign.org.uk

Technical details

• The Giving Campaign has been established to encourage a culture of giving and to increase the amount of money given to UK charities. One if its objectives is to work with financial advisers, encouraging them to be more proactive in encouraging their clients to think about the benefits of tax-efficient donations. The Campaign has Government and voluntary sector support for its aim to increase charitable giving in the UK.
• The Association of Independent Financial Advisers will provide for IFAs a favourable environment by representing and promoting the concept of independent financial advice, by establishing a forum for discussion on non-competitive issues and by the provision of information which will assist in the running of their businesses. AIFA was launched in September 1999 and represents 70% of the IFA market.
• APCIMS is the trade association of more than 200 firms who, on more than 400 sites, deal in stocks and shares for the UK's 12 million private investors as well as many overseas clients. Together our aim is to ensure that the regulatory, tax and other changes in the UK and across Europe bring real benefits to the investment community.
• Getting Britain Giving, a package of tax reliefs designed to increase charitable giving was announced by the Chancellor in the 2000 Budget. Measures worth an estimated 163400 million a year were introduced following a review of charity taxation and extensive consultation, and include:
  1. Gift Aid - abolition of the 163250 minimum limit for donations; allowing donors to join the scheme by telephone or via the internet with the minimum of formality
  2. Payroll Giving - abolition of the maximum limit of 1631,200 a year, launch of a three year publicity campaign and a 10% supplement on all donation for the duration of the campaign
  3. A new tax relief for gifts of shares and securities
• The MORI survey was conducted in two stages:
  1. qualitative stage: semi-structured telephone interviews were conducted with a range of different types of financial adviser to explore their experience and awareness of planned and tax-efficient giving to charity. 44 respondents were interviewed including Independent Financial Advisers, accountants, stockbrokers, investment managers and solicitors. Respondents were spread nationally across the UK
  2. quantitative stage: a web survey was conducted amongst organisations belonging to two professional bodies, the Association of Independent Financial Advisers (AIFA) and the Association of Private Client Investment Managers and Stockbrokers (APCIMS). 211 AIFA and 32 APCIMS respondents completed the survey. Full details of the survey are given in the technical notes in the summary report.

The data collection took place during August and September 2001, and the two stages were conducted consecutively to allow the findings of the qualitative research to inform the quantitative stage.