GENEVA (Reuters) - A recent boom in charitable giving has created new business for the world's leading banks, who are now competing to help their wealthiest clients give away money.
Maximilian Martin, the head of philanthropy services at UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz), said more and more prosperous people were interested in setting up foundations and arranging big gifts, mainly in education and health.
"The ambition level in philanthropy is really rising," he told the Reuters Wealth Management Summit in Geneva.
Bankers to the very rich, who have long offered their customers personalized advice in areas ranging from artwork to yachts, see the rising demand for philanthropic advice as a new way to engage with wealthy clients.
They also stand to win fees from managing endowed funds.
"If you're serious about providing value-added services for your clients, this is quite attractive," Martin said, estimating that wealthy clients channel 10 to 17 percent of their money to charitable endeavors. "As a financial institution we think we can add value on the management side."
UBS' big-bank rivals including Citibank (C.N: Quote, Profile, Research, Stock Buzz) and Merrill Lynch MER.N have also expanded their philanthropic offerings to meet growing interest from America and Europe, inspired in large part by multi-billion-dollar donations from business moguls Bill Gates and Warren Buffett.
Smaller wealth management players have also stepped into the ring. Boris Collardi of Switzerland's Julius Baer (BAER.VX: Quote, Profile, Research, Stock Buzz) told the Reuters summit that philanthropy had become a key part of their services, and would likely continue to grow.
And Reinhard Krafft at the German-based Sal. Oppenheim referred to an "astonishing" increase in European giving in recent years, said it was now critical to be able to offer clients philanthropic advice.
"It is not only a competitive prerequisite but also a means of good service. I cannot say 'I'm treating you from A to Z' but then not have a philanthropic service," he said, describing the sums involved as "an awful lot of money."
Asian clients have also made some overtures on charitable giving, Peter Flavel of Standard Chartered Bank (STAN.L: Quote, Profile, Research, Stock Buzz) said.
"It's a relatively new market for philanthropy in Asia," Flavel, who heads Standard Chartered's private banking operations, told the Reuters summit.
"It's something that's growing and there's a growing demand for it. Part of the demand will be pushed in a way by supply, by the fact that the private banks coming in from the OECD have these services," he said.
But some questioned whether financial advisors are actually best placed to provide such advice.
"It's questionable," said Sebastian Dovey of Scorpio Partnership, a London-based consultancy that advises the wealth management sector. Continued...
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