Financial Planners need to improve their knowledge of philanthropy, with just 5% confident about advising clients in this area, according to a new report.

Almost three-quarters (72%) of Financial Planners do not include philanthropy as part of their initial fact find with clients.

This is despite 21% saying they see a direct link between providing philanthropic advice and winning new business, according to the report from the Charities Aid Foundation (CAF).

Despite the knowledge gap, only 42% of advisers surveyed said they planned to increase their knowledge of philanthropy and how to advise clients on it.

A further 22% said they did not know where to signpost clients for the expertise they need.

Those Financial Planners regularly giving philanthropy advice said it helped them build on existing relationships with clients. Around half (56%) of advisers said they saw it as an opportunity to get to know their clients better and nearly half said it makes them feel closer to their clients.

A separate CAF survey of 500 high-net-worth individuals found that a third consider themselves to be a philanthropist and 62% say that giving to charity is an important part of their lives.

Demand for advice was also rising among younger generations, with over half of the 18-34 year-old HNWs surveyed (57%) and 49% of 35-54 year old saying an adviser could help with their philanthropy.

Mark Greer, managing director of giving and impact at the Charities Aid Foundation, said: “The next generation are expected to be the most significant donors in history. But it is how they approach their giving that makes them different from previous generations. As philanthropy advisers, we know it is essential to understand the motivations, values and attitudes of clients, as well as the mechanisms available to them, to ensure philanthropy is as effective as it can be.

“We would like to see philanthropy added to CPD and industry qualifications for financial advisers to ensure that private client advisers are able to better meet the needs of their clients. Forward-thinking advisers looking to provide a holistic service to the next generation would be amiss to ignore this rich topic of engagement.”

• CAF surveyed 215 financial advisers (24% of whom were Chartered Financial Planners), and 500 HNW investors (investable assets of over £1m), in October 2023.