Optimizing your legacy: the role of rebalancing in charitable giving
Charitable giving has evolved into more than just a selfless act for smart investors; it’s a strategic way to plan for the future. Donating to charities and worthy causes reflects a desire to make a substantial and intentional impact, demonstrating a more profound connection between wealth and purpose. Luckily, modern financial tools now offer a holistic approach to managing assets, allowing your clients to weave their philanthropic goals seamlessly into their overall financial strategy.
According to 2023 Giving USA, charitable giving in the US reached almost $500 billion in 2022. Although a decline of 3.4% from the previous year’s total, it’s still incredible when you consider the challenging economic conditions the last few years have brought about. And contributions from individuals made up over two-thirds of that amount, so if you haven’t begun conversations about charitable giving with your clients, now’s the time to start.
Tax efficiencies in legacy planning
Optimizing tax efficiencies is a cornerstone of effective legacy planning. Consider, for example, the use of donor-advised funds (DAFs) to make charitable donations. Designed specifically for that purpose, a DAF gives investors an immediate tax deduction and, if donating appreciated assets, avoids the capital gains tax that would have been due if they had sold the asset.
Rebalancing and trading software is crucial in strategically managing assets to minimize capital gains. By leveraging these tools, you can help your clients preserve their wealth while maximizing contributions to charitable causes and achieving their legacy and philanthropic goals.
Here’s how:
Rebalancing for long-term success
Effective rebalancing means adjusting investments to match changing financial and charitable goals, not just assets. Automated tools help keep portfolios dynamic and responsive to market changes, which is particularly important in an unpredictable market. This adaptability not only optimizes returns but also aligns investments with the overarching legacy strategy, fostering sustained long-term success.
Diversification as a cornerstone
Diversification is the bedrock of sound financial planning, with investments distributed across different asset types, industries, and regions. In the context of legacy and charitable giving, it becomes essential to weather market uncertainties. Sophisticated rebalancing software helps you to create diverse portfolios for your clients, protecting their wealth while supporting the charities that mean something to them.
Streamlining the legacy planning process
Legacy planning can be complex, but technology is simplifying the process. Automated tools streamline legacy planning, making it efficient and accessible, saving time, and instilling confidence in your clients that their financial and charitable goals are in harmony. As their advisor, using the right technology in the legacy planning process helps you to guide them toward a future where their financial success seamlessly intertwines with a purposeful and impactful legacy.
Help your clients align strategy and values with intelliflo redblack
Legacy planning goes beyond numbers; it’s about values. Rebalancing and trading software allow individuals to align their investments with ethical and philanthropic values. When your clients want to leave a legacy beyond financial wealth, the importance of rebalancing for charitable giving and delivering tax efficiencies is clear.
Rebalancing technology helps you empower your clients to create a legacy that not only preserves wealth but also contributes meaningfully to causes close to their hearts. With its streamlined experience and best-in-class user design, intelliflo redblack empowers financial advisors and wealth managers to optimize portfolios, manage risk, and adapt to market changes, amplifying the impact of their clients’ charitable giving strategies. Learn more about how intelliflo redblack can help you to support your clients in achieving their philanthropic goals.