Tips for Financial Advisors on sending gifts to clients

Thanking your clients for their loyalty and support

Sending gifts to others is a great way to show them that you care for and appreciate them. But this does not have to be limited to family and friends. Sending your clients gifts, whether it be in celebration of a holiday, the end of a year, a new home, a birthday, the anniversary of them becoming your client, or even the passing of a loved one, is a great way for Financial Advisors to demonstrate appreciation.

Some of the best Financial Advisors swear by showing their clients some gratitude in the form of a gift for their loyalty and support.

However, there is a fine line regarding gift giving as a Financial Advisor. You do not want your gift to cause any conflict of interest or influence any decision-making on the part of your client. You do not want to leave anybody feeling uncomfortable or obligated to work with you by sending extravagant gifts.

So, what gifts should you send your clients?  And where should you draw the line regarding gifting as a Financial Advisor? Keep reading as I unpack this.

The benefits of gift giving for Financial Advisors

The idea is that giving a gift should be a selfless act.  However, I do believe that there’s nothing wrong with reaping some form of reward or recognition in doing it.

Financial Advisors who give their clients gifts are likely to foster a stronger advisor-client relationship.

Gifts, especially those branded with your practice’s information, help spread brand awareness. Think about it, if you give a client a gift that they place on their desk and someone asks them about it, the chances are that they will tell the person about who you are and how you help them.

Finally, giving clients a gift with a personalized thank you note can boost user-generated content (UGC) on social media. If your gift encourages them to post a photo of their gift on social media and tag you in it, you have got some nifty UGC to share on your own platforms.

If your goal is to retain clients and build lifelong relationships, a little thought can go a long way.

How Financial Advisors are regulated when it comes to gift giving

Financial Advisors are regulated by reference to the Investment Advisors Act’s anti-fraud provision. There are two regulatory bodies involved as well: The Financial Industry Regulatory Authority (FINRA) and the Securities Exchange Commission (SEC). Depending on your registration, restrictions may apply to the gifts that you give your clients.

FINRA has set a limit of $100 per client per year. In other words, you can’t spend more than that amount on any client within a one-year period. On the other hand, the SEC does not have a specific gift limit.  Although its code of ethics includes mention of ‘moderate gifts and entertainment.  Also, each State’s department of insurance, etc. can and usually does list their own limits as well.

In addition to this limit & guidance, a lot of financial services companies have added their own gifting policy where they typically further limit the monetary value of what you can gift.

My advice, learn the rules & limits you are bound to before sending out any gifts!  It will vary depending on whether you are an independent RIA, life insurance agent, or between.

Once you learn what you are legally allowed to do, a good idea is to develop your own gifting policy that aligns with whichever body you are regulated by. Your policy should allow for moderate gift giving that cannot be labelled as extravagant. Your policy should include the definition of a gift, a clear approval process, and spending limits.

According to Reuters, gift giving as a Financial Advisor should always be free of conflicts of interest, and favoritism, and should lack any future obligation of the client or the advisor. Be sure to keep this in mind when forming your company policy.

Gift ideas for Financial Advisors to give to their clients

Let’s face it, a dollar is not worth much these days. And a 100-dollar limit does restrict you somewhat. Although I kinda get it I still find it crazy that this limit was set almost 30 years ago and still applies today.

So, what gifts are both appropriate and within your spending limit? Here are some ideas:

  • Chocolates or other food that is locally made means you are supporting a local business.
  • Donating money to a client’s chosen charity that is close to their hearts is a practice many Financial Advisors choose over a physical gift.
  • You cannot go wrong with a nice bottle of wine or a case of craft beer.
  • Personalised gifts that add a little joy to your client’s day, like thank you shortbread cookies or candles, go a long way to making a client feel valued.
  • A fireproof document safe is another great opportunity to bring that security metaphor in.
  • A coffee table book finishes any interior elegantly.
  • Branded stationery, although possibly a little predictable, is on the more affordable side of the spectrum.

If you’re a Financial Advisor, I’d suggest that you consider sending gifts to your clients at least once a year. It shows how you go above and beyond at every step and that you have their best interests at heart, and – who knows – you might get a referral or two out of it.  And with services like Greetabl, it can be easy and straightforward to manage your gift-giving without all the headaches that may come to mind.  FYI, members of Conneqtor will save 40% off their first qualifying order with Greetabl!

If you are looking for more guidance on best practices for Financial Advisors, visit my website to learn more about Conneqtor. Keep an eye on my blog for more advice and handy information written with you in mind.

Until the next time, all the best,

Derek Notman

    Teknik Informatika
    January 18, 2024

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