Podcast Transcript

Episode 29, Season 1

How to talk to your clients about their legacy and giving back, with Amanda Sartor

 

 Amanda Sartor: [00:00For us, it's really around identifying ... Like, we all give, really. It may be you sit on a board, a not-for-profit board, do pro bono financial planning work. You support your local club or your local school. We all actually give. I find the best thing to resonate with is, "What am I doing?" My clients are probably doing something similar. As our clients are moving up in terms of their purpose and their wealth capacity, it's like, do they want to now do more? 

Fraser Jack: [00:32Hello, and welcome to the Goals Based Advice Podcast, where I have conversations with pioneers of the new world of financial advice. I'm your host, Fraser Jack. I want to thank you so much for tuning in today. A big shout-out, also, to all the feedback and reviews I've received so far. If you're enjoying this podcast, please help me spread the word, share it with your friends or colleagues, and leave me a review on iTunes, or whichever platform you've accessed this podcast. I'd also like to thank our supporting partner, Advice Intelligence, for powering this podcast. You can book a demo directly on adviceintelligence.com. 

Fraser Jack: [01:05In this episode, I chat to Amanda Sartor, who helps advise and understand and offer philanthropic advice to their clients. This is her passion, as you will hear. She's dedicated to the cause. She works with both Elston partners in Brisbane, and also, Philanthropy Australia, which is a bit like the industry body. We cover things like what it is, and the structures that you can use, and also, where to find the opportunities to start the conversation with your clients. This is a undertalked about area of advice, and well worth paying attention to. [inaudible 00:01:41] chat now. 

Fraser Jack: [01:41Welcome to the show, Amanda. 

Amanda Sartor: [01:49Welcome. Thanks so much for having me, Fraser. It's lovely to be here. 

Fraser Jack: [01:53You're very welcome. It's lovely to be chatting to you today. Now, tell me, do you want to give us a quick overview of just what you're doing at the moment? 

Amanda Sartor: [02:00I'm actually in a really unique space. I actually support families and [inaudible 00:02:06] business owners to set up their own philanthropic foundation, or engage more thoughtfully in philanthropy and that legacy. 

Fraser Jack: [02:16And you're working with advisors to help them as well? 

Amanda Sartor: [02:19Yeah, definitely. As a certified financial planner myself, I've been in industry for a very long time. I guess a big proportion of my work is really to support financial planners, accountants, and lawyers to have conversations around philanthropy with their clients, and to support them and their clients in this area. 

Fraser Jack: [02:37It's a really specialized and unique area. Tell us how this came about. Tell us about your journey. 

Amanda Sartor: [02:44As I mentioned, I am a financial planner myself. I was loving a lot of what I did in financial planning, but I guess from my personal view is, I couldn't see myself staying in this industry for another 20, 30 years. So when my husband got a job opportunity up in Brisbane, we moved from Melbourne, it was really opportunity for me to reflect on what I wanted to do. I was actually quite formal. I engaged a life coach. I did a lot of soul-searching, mentoring. I did some education courses. I was really interested in the not-for-profit and the community sector at the time, I just had no idea what that meant. Admittedly, I'd done a lot of volunteer work, but I was really ignorant of the sector. 

Amanda Sartor: [03:24So really, for me, I decided to enroll in a fundraising certificate, which was a six-day course, an immersive course with a lot of not-for-profits and fundraisers, and people who worked in charities. That was the first really big eye-opener to how much is going on in the sector, how huge the sector is, employs over a million people, and, for me, the passion. Everyone is just so passionate about what they do. They're so willing to be collaborative, even though they actually work in a very competitive environment, and their willingness to be authentic and genuine, and just really believe in what they do. I was actually like, "Oh, maybe I would like to work in a charity." I just kept getting so much feedback from that course, and subsequently, in a lot of mentoring discussions I had in the sector, that, "No, you are in a unique position that you work in a private client advice capacity. What we would love for you to do, is to be an advocate for us. How do we break down the barriers and change the misconceptions around charity that are portrayed in the media?" 

Amanda Sartor: [04:30So I kind of decided, "This is my purpose, my cause." It hasn't been an easy journey, but I was really convinced that there's got to be an opportunity and a way that I can work more with families of the individuals and business owners to understand and engage more in their giving and make it a better experience for them, and for them to get a lot out of it, so we can actually grow the amount of giving, the amount of people that give. 

Amanda Sartor: [04:56From then, it's really, that was kind of about four, five years ago. So I was really fortunate to actually get a paid position [inaudible 00:05:05] philanthropic advice role at a multi-family office up in Brisbane. That was really [inaudible 00:05:12] deep end in really getting involved in the sector, and helping philanthropists and business owners do more from a structural and a grantmaking and a family point of view. It's really grown from there. It's been an amazing journey. I've obviously tried to back that up with, I've done a lot of postgrad education around philanthropy and social investment, which I didn't know existed, which has been really great as well. It's really [inaudible 00:05:38] from that point of view. I'm really excited at the moment to be starting up a new service offering around philanthropy at a Elston [inaudible 00:05:47] management firm up here in Brisbane as well. That's kind of the story. 

Fraser Jack: [05:50Yeah. One heck of a journey. [inaudible 00:05:53] curious, though, you did your fundraising certificate, or the course that you did, and then you mentioned that you had conversation around, you wanted to get into charity, and it was suggested that you were in a unique position. Who was suggesting that? Who was the people that you were talking to that said that you could be a great advocate [inaudible 00:06:10]? 

Amanda Sartor: [06:09It was actually quite diverse. It was specifically a lot of fundraisers and executives of charities, particularly with conversations they had had with donors, people that donate to the organizations, and general peers and colleagues, around people just really misunderstand this. In Australia, we're one of the wealthiest countries in the world. We seem to be quite generous. We do volunteer quite a bit, and we give quite a lot in disaster situations, and [inaudible 00:06:38] disaster relief around floods and droughts. But actually, in terms of the wealthy, so people who earn more than $1 million a year, only 40% of those people claim a donation in their tax return, which is incredibly low. So if you think about their capacity to give, and their professional advice around if they are giving to claim that as a deduction, only four out of 10 people do it. We're questioning, "Why is that? Why is there such a low engagement and awareness around philanthropy and giving?" Because one, obviously, there's tax effectiveness to it, but two, there's so much personally you can get from it, and so much impact you can have. 

Amanda Sartor: [07:16So that's really where I said, "Well, I'm in this position where I talk with these people, I advise these people. I know a lot of peers and colleagues who do the same. Maybe we need to shift the conversation that we're having with clients to talk about this, and open it up more from a personal point of view, a legacy, a family, a multigeneration point of view, a purpose point of view." 

Fraser Jack: [07:30I'm really interested [inaudible 00:07:37], because the idea of giving, to me, obviously, giving of time, volunteering, giving of money, which, whilst you're, I guess, still alive, you're [inaudible 00:07:48] money all the time to different charities, but then, how much of the money in the charity sector comes from after people pass away and leave lump sums and stuff like that? 

Amanda Sartor: [07:56Not a huge amount, to be honest. It really depends on the sector. We call them charitable bequests, or testamentary charitable trusts. They're the charitable options you can set up in your will. In, for instance, the animal welfare space, they have a really big proportion of their income comes from bequests and from wills. There's a portion, also, in the education and the arts and culture sector. But other than that, it's really tiny. It doesn't make up a big proportion at all of charities' income. A lot of income is still derived from government funding, and also just from, actually, just everyday individual donations, so small, regular donations from individuals when they set up a giving plan. 

Fraser Jack: [08:47Yeah. From the work that I've done with estates in the past, there was sort of two main areas of giving. One was, obviously, just giving a, bequeath a charitable lump sum, and the other one was setting up of an education trust, an education scholarship, if you like. What are some of the main ways you see happening in that space? 

Amanda Sartor: [09:08In the testamentary space, I think from a financial planning point of view is, we all have estate planning, or most of us have estate planning conversations with clients. We really are reflecting on what is the legacy that our clients want to leave. Naturally, clients want to make sure that they provide for their family and their children first, but more and more increasingly, particularly if there's more wealth than they feel their children need to live a good life, is what's next. It really depends on the flexibility and the control that the client wants. Charitable bequests are a really good option when you've got smaller amounts of money that you want to give, or you really trust and have a strong connection with one or two particular charities, for instance, Cancer Council [inaudible 00:09:55] Diabetes Australia, or something like that, a connection [inaudible 00:09:57] family. 

Amanda Sartor: [09:58Other options, as you mentioned, is your scholarship trust. That's a really powerful one for people who believe and really want to support education, particularly if they themselves have been recipient of a scholarship and want to have that legacy live on, where they can support other students in their secondary or tertiary education. There's also the option to do what we call just a charitable testamentary trust, which is, essentially, a quite a broad testamentary trust that you can set up via your will, which can really reflect whatever purpose that you want. That can be in honor of your family or your loved one, or of a cause, or of a specific region. You can do that through your own trust, or you can actually do that through another provider by setting up a charitable subfund, which means you establish a subfund within an existing trustee, and it's just a lot more accessible, and you only need smaller amounts of capital to set up that perpetual legacy. 

Fraser Jack: [10:56Yep. Now, how are you working with advisors to sort of bring the education piece out, and all that sort of stuff, [inaudible 00:11:03] advisors? 

Amanda Sartor: [11:04Naturally, I've got, I guess, two roles. One is actually providing the philanthropic advice to clients, and two is really that education and awareness piece with advisors. Internally, I work in a financial services company. Essentially, I work in a consulting capacity so there's a lot of internal education I'm doing to our financial advisors here. I also work very closely with external advisors. I'm in a fortunate position because of the unique service that I provide, that, essentially, it is a consulting service to only engage in this piece for whoever needs it. So really, the conversation comes down to is to really understanding what philanthropy is, what are the giving structures that your client can set up if they do want to set up a formal giving legacy. There's tax-effective structures available in Australia. The two primary ones are a private ancillary fund, we call a PAF, and a public ancillary fund, which we name a PuAF. It's really around, they're very unique tax structures. They've only been around since 2001, so they're not very well-known in the general public from a legal, from an accounting, and from a financial services background. 

Amanda Sartor: [12:18So really, it's around educating advisors around what those structures first look like, and then it's really around identifying catalysts or ideal clients that they could bring this up or have broader conversations around philanthropic legacy and using one of these structures. It's obviously not for everyone, but for the clients that do have the capacity and the wealth and do really see that strength in that philanthropic legacy, or engaging their children in this gift-giving tradition, particularly if there is quite a bit of money passing down between generations, is incredibly powerful, and those families themselves have got a lot from it. 

Amanda Sartor: [12:56It's really around showing some case studies, and then, really, those identifiers. Those key identifiers are really around if there's been a significant business fail, or if there's a significant tax event in a particular year, they're selling a property, they're receiving a big lump sum, and they've got quite a high tax year, that, generally, is the catalyst for ... "I've got more money than I expected. I've got quite a lot of liquidity. I've got a big tax bill. I want to reduce the amount of tax that I'm paying, so I'm willing to put a portion of that wealth into my own philanthropic trust that I can control where that money goes, and I'm not having to give half of that money to the ATO." 

Amanda Sartor: [13:37That's really one of the big catalysts. The other one really around that estate planning need. When we're talking with clients around what's the purpose of their wealth, what do they want to see happen [inaudible 00:13:48], because they're not going to be able to spend it all, we really reflect on, do they want the kids to have it all, or is that a concern? Do they want to have a family legacy live on, and what's the power in that if they set up the right structure, and they have it supported in the right way? Because essentially, these charitable trusts are what we call holding vehicles. They're, you invest money within the trust, and then you give small amounts to charity over a very long time. They're perpetual trusts that carry on. You could choose to give it all at once, but primarily, it's for families who want to have that perpetual giving vehicle, where they can give and give and give over time. 

Fraser Jack: [14:27Yeah. That's really interestingSo there's some really interesting structures that can be used. And then, I guess, the three areas that you're talking about was just that overview stage, then there's the trust structure stage, and then there's the opportunities stage. Might just take you quickly back to that very first part, where you mentioned, you know, what is it. Do you want to just run us through that? 

Amanda Sartor: [14:50I guess, essentially, philanthropy's, we call it the love of mankind. It's [inaudible 00:14:55] way of wanting to give back. You rightly pointed out earlier, Fraser, is, actually, philanthropy isn't simply just giving money, it's giving time, it's giving expertise, it's wanting to give back. It's obviously a very personal and value-driven area. It won't always suit everyone. But those who engage in it, they want to give in different ways, and they want to be involved in different ways. For us, it's, particularly if they're a entrepreneurial business client, their ability to be active and wanting to actually invest in a social enterprise, or in a innovation that provides social solutions, is really exciting for them, as opposed to a more traditional family, where it's around getting the children and the grandchildren involved in deciding what cause they represent, and to, like I said, set up, maybe a scholarship trust, and have that enduring legacy around education. 

Amanda Sartor: [15:50For us, it's really around identifying ... Like, we all give, really. It may be you sit on a board, a not-for-profit board, do pro bono financial planning work. You support your local club or your local school. We all actually give. I find the best thing to resonate with is, "What am I doing?" My clients are probably doing something similar. As our clients are moving up in terms of their purpose and their wealth capacity, it's like, do they want to now do more? And is it around, you know, I was so passionate around supporting the local surf club or the local sporting club for so many years, that if I've got the capacity to make sure that legacy can live on, and I can support them enduring, then that's really powerful. So it's really around connecting in those really simple ways with clients, and then extending that out. 

Amanda Sartor: [16:40I guess from a personal and a company point of view is, the reason we've invested in this service as well and I'm so passionate about it is, it's around making us all aware around what we're doing in the community. As staff, we're starting to set up a volunteer day where we're giving our time and expertise, and we're actually creating forums where we're bringing our community leaders and business leaders and professional partners together to work in our, "What do you want to do [inaudible 00:17:07] community? What can we help to support?" So a lot of it is really quite collaborative, which is quite powerful as well. 

Fraser Jack: [17:14Yeah. I really understand that, that first part of it, is really mindset, is that awareness, as you mentioned, just to realize that we do all give. We give time, and we give money. And to understand that our clients do the same thing, and understand and recognize those opportunities, you know, when you're talking with your clients about, "Ah, they're a volunteer here," or, "They give here," or, "They spend time," or, "They made donations in the past," that that's actually something that they do for themselves, and they want to do, [inaudible 00:17:43] find the opportunity to continue that conversation with them. 

Amanda Sartor: [17:47Definitely. It's, actually, really a simple part of the fact-finding process. [inaudible 00:17:52] really around, when you sit down with a client, either in a initial meeting or in a review, you might ... We have advisors here that are like, "I don't want to just be having the same conversation with my client over and over, we've set up the structures, we've set up the strategies, we want to actually engage in more fulfilling conversation ongoing." 

Amanda Sartor: [18:09So extending that conversation to, especially if they're retired or one of them doesn't work, "Do you volunteer, or are you involved in any not-for-profit initiatives? What's the most important thing to you? Is there a purpose that you need, or that you're doing? Do you feel a bit lost or a bit bored now that you've retired? Is actually getting involved in something philanthropical within the community important to you? Or have you had a family member become ill or pass? Is that important to you, to really honor that person or that legacy? How can we help you deal with that emotion and that loss, or, I guess, that kind of sense of, 'I want to be doing something, and I'm not sure what that is'?" 

Amanda Sartor: [18:55So it's really just broadening those conversations with our clients as we become more trusted advisors, is actually, the more we talk about what we're doing, and the more that we ask our clients, the more we're really building those really deep relationships. It permeates, you know? You get their kids involved, and then they're so much more likely to talk about you as an advisor in their social and their family circles when it's really around those personal alleys that you ... Particularly if a client is passionate or does work in the not-for-profit or volunteers, if you hit that button, you ask the question, oh my gosh, do they just not stop talking. You know? They're so excited about, and themselves so passionate, that once you unlock it, it just is really powerful. And then that [inaudible 00:19:38] that conversation over and over with others is really incredible as well. It's really around from a we wanting to be trusted advisors, and we seeing the opportunity to support our clients, and even grow our own businesses, it's really powerful to expand these conversations into more deeper areas. 

Fraser Jack: [19:56Yeah. It feels to me like that initial part, as we just mentioned, bringing out this topic in the initial stage, is a conversation with the client. Really understanding now, I wanted to delve into this a bit deeper, understanding the different structures involved here. You mentioned the public and the private were the two sort of variations. Do you want to just run me through those two areas, and say, "Look, generally, if it's this, it'd be a public, generally, if it's that, it would be private"? What are the examples that you can give? 

Amanda Sartor: [20:21Yeah. This is always an interesting part. I actually do have a comparison reference sheet, which I'm more than happy to share or send through for any listeners that really want to have a bit of a reference sheet to discuss with themselves or their clients. I guess I work on a spectrum from, "What's your lowest cost, lowest accessibility point," to, "What's your highest cost, highest accessibility complexity point?" When we're talking with advisors, we really sit down and go ... Some clients love the idea of a perpetual charitable fund, but one, don't have a huge estate, or they don't have a huge amount of capacity to give hundreds of thousands. 

Amanda Sartor: [20:58Our first option is what we call a charitable subfund, which is essentially like a management ... Sorry ... We liken it to your retail super fund. We've got your retail super fund equivalent, which is your charitable subfund, and your self-managed super fund equivalent, which is your private ancillary fund. What that means is, essentially, you set up your own management account, which you can name after your family, you can name after a cause or a loved one, and you put a sum of money, which becomes your perpetual charitable fund. That lives on. 

Amanda Sartor: [21:29What, essentially, you're doing, is you're outsourcing the investment control of that to the corporate trustee. You're outsourcing, obviously, all the trustee responsibilities, the financial, legal aspects of that trust, to somebody else. So you pay a percentage fee. It's usually around 1% of your balance you pay to the trustee to manage all of those aspects. There's no set up fees to set up one of these vehicles. You then have this fund. What you're required to do each year, is to give at least a small portion of that to actual operational charities, so charities on the ground. It's 4%. So 4% of your balance each year, the trustee will come and ask you, "Where would you like to grant your money? What cause or what charities are important to you?" You can give more. You can always give more than the 4%, but legally, you're required to give at least 4% ongoing every year. It's really equivalent to what the income generated on your portfolio, usually, you give that away, and the corpus or the capital continues to grow. 

Amanda Sartor: [22:26That's, really, your first entry point. It's a really good way, because you only need as little as $50,000 to set up one of those perpetual charitable funds. You can add to it, but you don't have to. You then go up to the next, I guess, spectrum, for clients, like who values self-managed super funds, they value the control. They value the flexibility and the options available to them. That's where that private ancillary fund is your second option, which is obviously high cost and high complexity, but it's a lot more control and flexibility. Essentially, it's a discretionary trust that is set up, and you need to have a corporate trustee. And then that vehicle, both these vehicles are endorsed as registered charities. They themselves are fully deductible. So any money you put into these vehicles fully offsets any taxable income. That's why they're very attractive in high income tax years. 

Amanda Sartor: [23:24So that private ancillary fund, we usually say because it costs around four to five thousand to set that vehicle up, to register it, to get it endorsed as a tax-deductible vehicle, we would recommend 400 to 500,000 in capital to set up that perpetual trust. Essentially, because you are the trustees, you have full control over choosing your investment advisor or your financial planner to manage that money on your behalf, but there are ... And obviously, you have a lot more flexibility in how you invest the money and how you give the money. You are required to give 5% of your balance to charities. It's slightly higher than the subfund. You need to give the 5%, as opposed to the four. That's because these vehicles are private in nature, so you don't have to publicly disclose what you're doing to anyone, you can be anonymous, which is quite important to a lot of people. 

Amanda Sartor: [24:18Of that vehicle, the biggest ramifications around this vehicle is if you do decide to set one up, you need to have an independent, responsible person to sit on your board with you. We [inaudible 00:24:31] with a lot of couples. They always need to source a close friend or a trusted advisor, an accountant, a lawyer, to sit as a responsible person. It is difficult, sometimes. And personally, a lot of financial planners don't usually take on this role because of the conflict, particularly if we're the investment advisor over the portfolio. So it's really making sure that our clients can source that person to sit on the board with them. 

Amanda Sartor: [25:00And then ongoing, it really depends on how much support clients need, but they do need to lodge financial statements of audits every year, like you would with a self-managed super fund. A lot of the times, we actually run a full service for clients because there are quite a lot of governance and regulations that need to be followed. And also, for our clients, we want them to get the most out of it from a family point of view, engaging their family, and also around the impact their making, so who are they granted to, who are the best charities, who are most aligned with what they want, and how do we really measure that impact? That's really important. We can support clients from a full service capacity, and a lot of the times, accountants and auditors can support all the basic admin functions. They're essentially your two structures that you set up while you live. 

Fraser Jack: [25:41Now, just on this, because it's a really good overview, actually, [inaudible 00:25:46], obviously, it's pretty clear that over 400 or 500 is where the private ones kick in. Now, just for the advisor's sake, like if they're talking to their clients about putting some money into one of the subfunds or the public style funds, the advisors are not helping with the investment management of that money. Is that correct? 

Amanda Sartor: [26:06]Yeah. With the subfund option is you're essentially, that is a donation being made into the client's charitable subfund, but that's been outsourced to whoever that corporate trustee is. As the investment advisor, you wouldn't have control over how that money's invested. It becomes that vehicle. It's really that private ancillary fund where the advisor has full control over [inaudible 00:26:29]. But it is still a really valuable option for clients to set up that perpetual legacy. And obviously, it's reported on every year, and it's included as part of, I guess, their ... Even though they don't have control over it, it's not their money anymore because they're giving it to charity, but you can still report on it, and get overview. One of the foundations that we use who run these subfunds still give advisor access, so you can still have online access all the time to what they're doing and you can report on it, but essentially, it becomes an outsourced part of the client's financial position. 

Fraser Jack: [27:02But the advisor would still be having those conversations with the client about who they're going to give to this year, how much they're going to give, all those ... what the returns were, how much they can give and to which charities, I suppose? 

Amanda Sartor: [27:13Yeah, definitely. Definitely. [inaudible 00:27:16] that's the really valuable part, and it's actually around ... That part of the conversation isn't necessarily around the investments anymore, it's actually around the family legacy, the family purpose, what are they doing in their spare time, what are they passionate about? It's still part of what you advise on. You can still see what they're doing. It turns into that conversation around, "Who do we want to give the money to this year? What's really important? Do we want to seek some specialist support from someone like me to help, or actually, are we really clear about what we want to do," and we can have those conversations with client and their kids and, potentially, their grandkids. So that's really where the power of that conversation comes in. 

Amanda Sartor: [27:50So yes, it's a shift. It's definitely a shift in terms of, now, we're talking to a client about money we don't manage, which can be a little bit off-putting for some advisors, but I think it's incredibly empowering around, how do we broaden those conversations and really become a trusted advisor? And the way that a lot of advisors charge now, it doesn't impact the [inaudible 00:28:08] because we're looking at, we're providing X level service for X level fees, this is just another important aspect of your family and financial position that we want to support you and talk about. 

Fraser Jack: [28:19Great. Okay. Thank you. Now, just on that, going to sort of the third area that I see, which is really the advisors finding the opportunities. You mentioned, obviously, large tax bills and things like that, but what are some of the triggers and opportunities that advisors should be looking out for? 

Amanda Sartor: [28:36We try and keep it really basic, so it's really easy for advisors to identify. From my experience, the biggest one is when there is a big tax event or liquidity event. That is particularly so when a client's had a successful business, and they've decided to step back from that business, it gets taken over, or they get sold, and they've already been very active in their business and the community. A lot of business owners are already doing a lot in the community. They're donating. They're providing pro bono goods. And then when they sell a business, they sit back and they feel, really, a bit lost, like, "What am I doing with my life now? I've been really busy, really active." 

Amanda Sartor: [29:15So actually, it's one, the tax conversation, "Let's reduce your taxable income," but it's all the conversation around, "Well, what's the purpose of all this wealth now? What are you going to do? What's going to keep you occupied? If you've already been doing this much for charities, how can you stay engaged in a more tax-effective and strategic way?" That's when those giving vehicles can really be discussed in that position. As much as I don't like to harp on around it, clients won't do this because of the tax issue. They definitely won't. They need to believe in it and be aligned in it. But in terms of identifying the opportunities for clients, and given our role as a financial advisor, it's really around those tax [inaudible 00:29:54] questions that is a really easy way to bring it up for those clients. 

Amanda Sartor: [29:58Also, for clients who have retired. We have a lot of clients who have very high government pension schemes, and they'll never have a significant high tax bill, but they have, actually, quite a lot of money that they'll never spend because of these lifetime income streams. [inaudible 00:30:19] back with them, and having those conversations around, "What's keeping you busy? What do you want to do in retirement? Do you have family? How do you want to engage them? Do you feel like you want to get a bit more active and involved," and, "You already volunteer for X and Y," you know, particularly like a charitable subfund, where they give a portion of their income each year to reduce their income in small amounts is quite powerful, and they can build that up as a legacy. 

Amanda Sartor: [30:45The other big conversation, as I mentioned, is estate planning, which is really around identifying what's your legacy, how much is enough for your kids, and how do you engage in a legacy beyond your own life? The biggest one is, really, you've got a client doesn't have any beneficiaries, it's absolutely a no-brainer to discuss around this charitable legacy, because if they've got nobody clear to give their wealth to and they're going to have wealth left over, they need to give it somebody, a charitable trust, or even setting up a subfund or private ancillary fund while they're alive, and at least starting to put money into it, means that that vehicle doesn't form part of their estate. 

Amanda Sartor: [31:26I work quite a bit with estate planners, and there's a lot of litigation now around children not having equalized estate, and courts are biased, or they really prefer for kids to have an equal amount of their parents' estate. So for a couple or parents, if they want to set up a charitable legacy, and they want to use most of their wealth to do it, that will actually get litigated in their estate. The kids aren't provided for, unfortunately. 

Amanda Sartor: [31:55So if that is something they want to do, it's about how do we bring that conversation forward, and be like, "Well, you've said you wanted to set up a charitable legacy, scholarship trust, or having that charitable legacy's really important to you, so maybe, you need to be aware of the options that you can do while you're alive, because one, they're more tax effective, we can reduce your income now, but two, that will actually become an asset that's not part of your estate, so you can make sure that it will continue on. And if you do have kids, you can [inaudible 00:32:23], so you may actually reduce the hurt and potential confusion around kids not getting all the wealth or the inheritance that they may have expected, which, unfortunately, comes up bit more." 

Amanda Sartor: [32:33They're really the biggest areas when we're having conversation with clients that we focus on, just to keep it a bit more focused. But essentially, some clients are just very philanthropic, and they'll talk about it. So then really being aware around, "Well, what do you want to achieve? Do you know about using one of these vehicles? This is how they can operate." 

Fraser Jack: [32:54Yeah. Couple of quick questions out of that. Firstly, what happens when, like you said, something up in the public sector subfund, and then you pass away, what happens to the balance? Is it just given to the charity then? Or ... 

Amanda Sartor: [33:09It's up to you. Essentially, what we do, if you set up a charitable subfund through like a public trustee or corporate trustee, they'll always ask you when you initially set that up is, "Who are your predecessors? If you were to pass, who now takes control over this account?" You can elect family friends, you can elect your children, and then it essentially becomes their charitable fund. If you don't have beneficiaries, you can be like, "Upon my passing, please distribute all my charitable funds to the charities that I've given to," or you can say, "I want to keep my legacy living on. I will allow you as the trustee to manage it on my behalf, and continue to give that 4% every year forever." I love to talk about this one example just around that power of a philanthropic legacy. There's actually a charitable trust that was set up called the Helen Macpherson Smith Trust in Victoria in 1951. She was actually quite wealthy. She bequested £275,000 in 1951. That was around 550,000 Australian dollars. She had no beneficiaries, she knew no one, so she put it into a charitable trust through her will. 

Amanda Sartor: [34:18So in just under 70 years, that charitable trust now is worth $100 million. I guess from my point of view, what is more profound in that 70 years, is that trust has actually also granted $113 million to charities. In 70 years, this woman who nobody knows has already given $113 million to charities in Victoria, and still has $100 million, which is generating investment income. She wouldn't have anyone [inaudible 00:34:50] remembered her, but she's so well-known in the philanthropic sector, and her legacy lives on so powerfully because of her ability to do this. 

Amanda Sartor: [34:58When those kind of stories really resonate with clients, that's when you know there's some interest in it. So I always open with a story like this to, I guess, help people work out, "Yeah, I love that," or, "I don't," and what's the power around why I would set up one of these vehicles. 

Fraser Jack: [35:14Yeah. That's a really wonderful story. I'm really glad you shared that. Thank you. It's those sort of stories that, as you mention, do resonate with the clients in their legacy and what they can leave behind. 

Amanda Sartor: [35:24Definitely. And they're so powerful, you know? It's just like, as financial planners, we love this story around compounding, but compounding can mean so many different things. It's compounding for you and your ability to save for retirement, but actually, when you pass, it's that magnifying that impact and that legacy that just continues to live on and live on and live on. Super powerful. 

Fraser Jack:[35:46Yeah, it certainly is. Now, some people, as you mentioned before, might be motivated by the high tax bill, and be able to say, "If you're planning on giving this money at some point, now is the point," and others would be more motivated by hearing that story and just thinking, "Wow, I want to be like that." Now, how can advisors that are seeing their clients chatting every day, may listen to this, may have come across something they see as an opportunity. What can they do as the next steps? How can they get a hold of you or talk to you or find out more about this? 

Amanda Sartor: [36:17Yeah. I'm really happy to speak with any advisors who are interested to learn more, whether it's helping them broach the conversation with clients, they want more resources, or around how we can support them in the philanthropic advice area for their clients. So I'd say just absolutely reach out to me on LinkedIn, or I really recommend people go to our website. I'll shoot the link through. We have philanthropy web page on there which we do a podcast with a client as well around their personal reasons for setting up their own foundation, and you can contact me via that page as well. That's [inaudible 00:36:55] Philanthropy is Personal. So I really say just reach out. I'm actually in the process of starting to record some videos, which I'll start publishing through LinkedIn, and through our subscriber list. So if you want a few more kind of snippets and education and short bursts of strategies around how you can broach these and where we can support you, I would just say get in contact, and just let me know you want to learn a bit more, and we'll support you as we can. 

Fraser Jack: [37:23Great. We'll include those in the show notes as well. But essentially, the easiest step is to jump onto your subscribe list, and put their email address in, so they're getting information about it regularly, and then they can contact you if they see something. 

Amanda Sartor: [37:35Yeah. Definitely. What I'll get you to do as well, Fraser, as I mentioned before, is I've read a really relevant article a few weeks ago, which I would love to share with the listeners if possible around Scott Pape, The Barefoot Investor. He did a recent interview around why philanthropy is so important to him. I think being one of the most recognized figures for everyday Australians and us in the industry in a positive limelight around why financial literacy and education's so important is really powerful. His whole philosophy is around spending, saving, giving. One of his quotes was around, "The worst thing you can do, is to leave large amounts of money to your kids," and really, around, it's not around what you do in philanthropy, you may just be volunteering, or you may just be supporting a local organization, it's really around embedding those values of giving in your children to create good human beings. 

Amanda Sartor: [38:34Because I think we all try to ... sometimes, we try and overcompensate for not being around [inaudible 00:38:39] kids. Actually, that can really ... doesn't all the time, but that sense of entitlement can really start to grow in children. I think he just puts it really nicely. He himself donates through his work. He gives quite a lot in both in-kind and money. It's really been a powerful article around how important giving is in that financial education and values piece for families, and particularly, transferring those values and that wealth to the next generation. I'd love to put that on the show notes as well and to share that, because I think that's a really interesting article. 

Fraser Jack: [39:16Great. That's in the form of a blog or an article? How's that? What sort of ... 

Amanda Sartor: [39:19Yeah. It's a bit of a blog, like a written article. I thought it would've been a recorded one, but they've drafted it. It'll be a link to the Philanthropy Australia website, which is the industry body, essentially, for philanthropy. 

Fraser Jack: [39:30Yeah. Now, talk to me about ... I can't even say it ... Philanthropy Australia and the industry body. You do a lot of work with them. Tell us about that. 

Amanda Sartor: [39:37Yeah. We have the FPA and the AFA in the financial services industry. Our peak body is Philanthropy Australia, which is essentially a member body for our charitable foundations of our philanthropists, also for our not-for-profits and charities. We call [inaudible 00:39:53] social investors. It's essentially [inaudible 00:39:55] that we can all come together to collectively make a big impact in really problem areas. I guess I work with Philanthropy Australia in a associate consultant capacity. I support a lot of our members in the family and philanthropy point of view. I'm actually running a number of workshops around Australia in June and November. Let me know if that's of interest for you or your clients. 

Amanda Sartor: [40:22That's really around ... I guess we've got a really unique position with our really wealthy clients, is helping them successfully transition wealth to the next generation. A big part of that is educate and engaging the younger generations. As advisors, we work in the financial education space, structuring and so forth, but actually is, how do we instill and communicate those values between generations, and how philanthropy can play a really crucial role in actually creating strong values and gift-giving traditions, and understanding the importance of stewardship and responsibility? Because essentially, when a family sets up a foundation, that money actually is not theirs anymore. They're stewards of giving that money to the public good. The conversation really shifts, and that's when a lot of kids and grandkids are involved to really be empowered to make those discussions. 

Amanda Sartor: [41:12We're running workshops around that. We also do a bit with advisors directly around financial education ... Sorry, philanthropy education. What are the giving structures? How do we bring up the conversations? How do we roleplay it? How do we actually have those conversations? Where's the identifiers, and so forth. I'm really passionate in this space, and trying to support the awareness and grow the awareness as much as possible. If you've got any other ideas, let me know. I'm all about trying to find ways to support [crosstalk 00:41:43]. 

Fraser Jack: [41:43Yeah, get the word out there. I'm more than happy to help. [crosstalk 00:41:45] Now, you mentioned June and November, the workshops. Whereabouts are they? Are they online, or are they ... 

Amanda Sartor: [41:50No. They're in person. In June, I'll be in Adelaide, Melbourne, Canberra, Sydney, Gold Coast, and Brisbane, so all along the east coast, and then the Australian Bight. We're running face-to-face workshops for clients around really engaging in that family philanthropy. And then in November, we're just running two more in Brisbane and Adelaide, so that's where the demand is. It's a very big philanthropic city in Adelaide. I think we all forget about it. 

Fraser Jack: [42:18Well done, Adelaide. 

Amanda Sartor: [42:20Yeah. That's it. Yeah. I'm really excited. We've got information around those workshops as well, so if that's of interest, that's run through Philanthropy Australia, facilitated myself. We'll be getting actual people who are part of foundations, their own family foundations or corporate foundations, to speak at those around their own journey. So it's a really good collaborative session. 

Fraser Jack: [42:41Yeah. Great. And as you mentioned, you're doing some videos and some podcasts and client stories as well. I think it's really important, the client story, so that's fantastic. 

Amanda Sartor: [42:49Yeah. We did one last year, and we're really going to start rolling them out this year. We just have to start getting our clients more comfortable ... Naturally, a lot of clients, they're very private, and they don't want to be seen to be blowing their horn. But they're seeing more and more as they get more involved, they need to talk about what they do, because that's the only way to get other people to get involved. So yeah, it's a really exciting initiative. For us, we're really trying to help find ways to engage and share those stories with others. So yeah, hopefully, there'll be definitely more in this space this year, so we'll get onto that. 

Fraser Jack: [43:23Lot of things to work on now. Just to be clear, so advisors wanting to get into or find an opportunity, they can talk to their client, but then if they get stuck, they can talk to you. And then, do you also talk to their clients for them on behalf? 

Amanda Sartor: [43:35Yeah, definitely. Particularly because philanthropy is its own quite bespoke and unique space, is we're here to support the advisor as a consultant in the philanthropic space, and that's very much my role. I come in if I'm needed, if a client has interest or wants to learn more about how they can set up a trust, a philanthropic trust, or how they can get their kids involved, or what are some strategies around grantmaking and having high social impact. I come in on fee-for-service basis to support clients in those capacities. 

Amanda Sartor: [44:08I very much work [inaudible 00:44:10] with the advisor in the philanthropic space only to support them and their clients if they need support in that area. Some advisors, they're just comfortable to refer and be like, "You look after the PAF. [inaudible 00:44:21] investment side." Others, it's very much a collaborative I come along to the meetings when it's around that family foundation, and we facilitate those together. But definitely, some advisors are comfortable to manage it all themselves with their accountant, but a lot aren't because it is such a bespoke area, and there's lots of nuances that just are missed. So I tend to just make sure that everyone's at least set up initially and know what they're doing. We have a few initial workshops that we could do with clients when they first set up, and then ongoing support as well to really make sure they get the most out of the structure, and obviously, they're managing it in a compliant way as well. I guess I support advisors directly and also with their clients directly as well. 

Fraser Jack: [45:04Yeah. It sounds like a very big collaboration between the accountant and the estate planning lawyer as well. 

Amanda Sartor: [45:10Definitely. Definitely. 

Fraser Jack: [45:13Tell me about the future in this space. Is it growing? It is something that's more and more and more all the time, or is it stagnant? 

Amanda Sartor: [45:20No. It's actually, it's growing. It started from a very small base. If we look at the sector that I'm really operating in, it's for wealthy individuals to set up a giving structure that they can invest that money and give over time. Your private ancillary fund structure only came into existence in 2001. It's such a new area. It's like [inaudible 00:45:44] family trust literally only became a legal structure in 2001. So it went from zero ... There's about 1,600 private ancillary funds in Australia, so it's actually grown exponentially, but from a nil base, and it's growing quite quickly, the awareness, the traction. I guess from a private point of view, there's more awareness [inaudible 00:46:03] people have more wealth, particularly in Queensland, we're very much what we call a new wealth state, so the first generation of wealth-makers are now retiring or looking at moving that legacy on, so now, philanthropy is becoming more relevant. In Victoria and New South Wales, it's more of a multigenerational conversation around stewardship of money, or adding to it, or making [inaudible 00:46:27] impact. 

Amanda Sartor: [46:27I guess the biggest [inaudible 00:46:29] that we're seeing now is very much in the private business, small listed business space, is a lot of partnerships or collective businesses or family businesses are going, "Well, I want to be doing more in the community in the philanthropic space, and I want our business to be seen doing more in terms of engaging our staff, in terms of having greater impact, in terms of feeling like we're leaving a legacy that aligns with our business, and our business objectives so we have a legacy, we grow, we're successful, and we're sustainable, and what we're doing isn't a scattergun approach, it's actually very aligned, and is actually around increasing productivity, having a really clear, positive community image." I'm working more and more in that strategy space around philanthropy for private businesses, and those structures they can use as well. That's a bit more complex, but that's definitely a more exciting area. It's definitely growing, but [inaudible 00:47:24]. 

Amanda Sartor: [47:24So you think about how many self-managed super funds there are in Australia, like six, 700,000, I think, compared to 1,600 PAFs. It's a completely different market. But that's why there's so few of us [inaudible 00:47:36] in this space, but I really think that it's growing, and there's more people willing to have the conversation, more people are willing to be open about it, and we're forming more stronger communities around it. It's not always easy. It's a really challenging space in a lot of ways. But I really want to just see the amount of people that give grow, and for those people to actually get a lot more from it themselves so that naturally, they want to give more and more and talk to their friends. It's always a reciprocal relationship. 

Fraser Jack: [48:07It certainly makes sense that the advisor brings up that conversation. Now, just quickly, the, obviously, estate planning can be very state-based, and obviously, tax is nationally, but where does this sit? Is it national? One legislation? 

Amanda Sartor: [48:18Yeah. Yeah. The legislation around the giving structures are national. Obviously, there's some little things around stamp duty, which obviously apply in each state, but the giving structures are national structures, not state-based. And really from estate planning point of view, they [inaudible 00:48:36] in a similar capacity, but there's [inaudible 00:48:37] nuances that I would always work with the relevant estate planner in their state as well, particularly if there are other structures or assets that may impact that. But from a giving point of view, they're very simple. 

Fraser Jack: [48:48Yeah. Fantastic. Thank you so much. Now, couple of quick questions. When you're talking to consumers around getting their trust bits and pieces in place, what sort of tips do you give them around advice, I guess? 

Amanda Sartor: [49:04Around consumers? I'm a really big, passionate supporter for financial literacy for women, naturally, from where I've come and what I do. I, obviously, now work in philanthropy, but really, around the financial advice space, it's really around transparency, so when you're engaging with financial [inaudible 00:49:24] actually really critical, like we all need accountants, we all trust lawyers, we're very much a highly qualified group of people. It's around transparency [inaudible 00:49:34] relationship transparency [inaudible 00:49:35] and being able to really understand what's going on, and asking [inaudible 00:49:39] hard questions around [inaudible 00:49:43], why are you doing what you're doing? What's the personal drivers? Where's the authenticity around that? Do they always start with asking about you and what's important to you and your goals? If the client's not really focusing on you, and they start talking about investments or products in our first meeting, then I would say, "I don't think that's good," because they're not actually determining what's important to you first. 

Fraser Jack: [50:06Yeah. Now, advisors wanting to get into this space, what sort of quick steps or quick tips you want to give to them? 

Amanda Sartor: [50:15There's not really any quick steps. It's a bit of a hard process, to be honest. But in saying that, there's opportunities. There's some other firms that are doing more work in the private philanthropic space. There's one in Sydney called [Koyote Capital 00:50:30]. There's a not-for-profit in Sydney called Australian Philanthropic Services that are supporting clients more in this area. I would say reach out to myself or someone else you know [inaudible 00:50:44] space, and ask them, "What do I need to learn? What is it that I want to do?" Admittedly, it's very hard to be a full service financial planner and be able to run this really confidently for clients on your own. I've had to make the decision that I'm actually solely just doing philanthropic work because you just can't be over everything all the time for clients. It's quite a complex sector. 

Amanda Sartor: [51:08It's also, I would just say reach out to one of us. We're all willing to be mentors and support you. Everyone's growing. We're actually all growing, and looking for passionate individuals who really get the client, and themselves are passionate about the not-for-profit sector. I think if you've got that passion and you want to see it grow, then that's really where the power is. We hope that we can keep growing this area, but really, in terms of adding it as a core niche of what you do for clients, I think that's quite powerful to have those conversations, because that will really set you apart. It's really around just getting upskilling around that, so getting access to ours or Philanthropy Australia resources and workshops to be able to have those conversations. 

Fraser Jack: [51:50Fantastic. So there's plenty of opportunities, if you want to outsource it all, or you want to get involved in it. Thank you so much. Now, quickly, my last question is just really around you. Tell me about your ... If you have a do-over and go back and give yourself some tips and advice looking with hindsight, [inaudible 00:52:07] go to, and what tips would you give yourself? 

Amanda Sartor: [52:10I think the biggest thing is, you know, you always look back and you go, "Oh, I'm so glad I did that," but at the time, you're like, "Oh, just dying," or, "I'm really struggling." I think the biggest thing for me is, I absolutely threw myself in the wild, deep end where the sharks are with this sector to get involved. I just said, "Yes." I just said, "Yes, yes," an opportunity that I pursued. I look back, and it was the most valuable opportunity, but at the time, I was a little bit resentful and anxious and stressed. I think sometimes that always ... And I do it every day now, but constantly reminding ourselves that it's actually good to feel uncomfortable. We need to be out of our comfort zone all the time if we want to grow. That's where we want to be. That's really powerful. 

Amanda Sartor: [52:58Admittedly, one of my small things is, we lived overseas, I, now husband and I many years ago, again, I didn't push myself enough out of my comfort zone. I gave up after about ... I say I gave up but, you know, it was quite hard after about 18 months, two years, and came back home. I really regret that. I really regret that I actually had a lot going on [inaudible 00:53:18] opportunities, but I just didn't see past the initial hurdles. I mean, I was quite young. I was in my mid-20s. But I was frustrated that I didn't get to do that, so I really want to redo that. I would really love to live overseas again, and that's kind of been my [inaudible 00:53:34] that just stayed there, that's like, "Oh, I want to feel like I've done what I originally wanted to do," and I wanted to work overseas. 

Amanda Sartor: [53:40So that's kind of something I would really want to do again. But I think sometimes it's that initial anxiety and hurdle that's forcing yourself to step back and not make an immediate shift straight away, and just going back and forth and determining why are you feeling like that, as opposed to jumping the gun too soon on opportunities that you actually innately really wanted to do. 

Fraser Jack: [54:02Wonderful. Thank you so much for sharing your story, Amanda. Thank you for coming on and giving us some great information about philanthropic ... philanthropy. I can't even say it. 

Amanda Sartor: [54:11Oh, philanthropy. 

Fraser Jack: [54:12Philanthropy. 

Amanda Sartor: [54:16It's okay. Everyone at my work [inaudible 00:54:16]. 

Fraser Jack: [54:17Philanthropy. Wonderful. Thank you so much. I'm sure the advisors got a great deal of information out of this, and will be contacting you to get more information. 

Amanda Sartor: [54:25Thank you so much for your time. I love your podcast, so thanks so much [inaudible 00:54:29]. 

Fraser Jack: [54:28No problem. Thank you. 

Amanda Sartor: [54:30[crosstalk 00:54:30]. Bye. 

Fraser Jack: [54:32If you haven't already, I'd love you to subscribe to the podcast on your podcast platform of choice. To continue the conversation, head over to our social media channels. We'll catch you next time. 

 

 

Disclaimer: This document is a transcription obtained through a third party. There is no claim to accuracy on the content provided in this document, and divergence from the audio file are to be expected. As a transcription, this is not a legal document in itself, and should not be considered binding to advice intelligence, but merely a convenience for reference.