In an effort to increase charitable giving across the U.S., the Fidelity Charitable Gift Fund, an independent public charity within the donor-advised fund program of financial services conglomerate Fidelity, has rolled out the Charitable Investment Advisor Program.Fidelity's new offering allows independent investment advisors to provide discretionary investment management to the Gift Fund for contributions made by the advisors' clients.
Through the program, advisors recommended by Gift Fund donors develop and implement an investment strategy for charitable contributions held in the Gift Fund.
The Gift Fund Board of Trustees has set guidelines for the qualification of advisors and for the investment of funds in the fledgling program. The Gift Fund offers advisors access to a wide variety of investment options, including publicly traded U.S. equity and fixed-income securities, Fidelity and non-Fidelity mutual funds, exchange-traded funds, and other securities offered on U.S. exchanges.
Qualified advisors can participate in the Investment Advisor Program regardless of whether they have an existing relationship with Fidelity.
The program is available to Gift Fund donors who have a minimum of $1 million in a Gift Fund Giving Account. Fidelity said that the introduction of the Charitable Investment Advisor Program is designed to support the Gift Fund's mission of furthering its tradition of philanthropy.
The new program follows several other enhancements recently adopted by the Gift Fund, including administrative and investment fee reductions, the addition of third-party mutual funds to several investment pools, and new pool choices.
"We recognize that more Americans are seeking comprehensive wealth management planning from professionals, and that charitable planning is an increasingly important component of that plan, especially among the millions of Baby Boomers who are looking to give something back and leave a legacy," said David Giunta, president of the Fidelity Charitable Gift Fund, in a statement. "Through our new program, the Gift Fund can help donors and their advisors more effectively integrate charitable giving into the donors' overall financial plans by allowing donors' contributions to be professionally managed in a style that is consistent with the way assets in their investment portfolio are managed."
A need for more planning
A recent survey of registered investment advisors conducted by Fidelity said that, while RIAs recognize the importance of charitable planning, the strategy is underutilized.
As an example, more than three-quarters (77 percent) of those surveyed indicated that they offer charitable planning or advice to their clients. However, they provide this guidance for only 16 percent of their clients - less than half the number that many advisors themselves think appropriate (34 percent).
In the same survey, more than one quarter (27 percent) of RIAs revealed that their clients' interest in charitable planning has increased over the past two years. As a result, nearly 73 percent of RIAs are planning to take action in the next five years, including 59 percent who said that they would need to become more fully educated about charitable planning strategies and products.
Overall grants to charity from the Fidelity Charitable Gift Fund surpassed $935 million for the 12 months ended May 31, up 27 percent over the same period a year ago. Contributions to the Gift Fund for the same period were $1.1 billion, up 27 percent year-over-year.
For more information on the Fidelity Charitable Gift Fund, visit www.charitablegift.org online.
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