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Introducing SRI To Prospective Advisory Clients

On Friday, June 1, 2018, Kathryn Morrison, Melissa Murphy and Jake Oxley, of SunStar Strategic hosted a lively roundtable discussion, alongside Bob Goellner at this year’s annual US SIF Conference. The topic, Introducing SRI to Prospective Advisory Clients, garnered an enthusiastic response.  

Participants came from across the ESG spectrum and exhibited great energy around prospecting for value-based investors, introducing SRI/ESG to existing clients, and discussing the various attitudes investors have toward social responsibility. 

The table conversations US SIF sponsors facilitate robust interchange and learning compared to the traditional panel/audience model where most people can only listen. As ideas and experiences pinged around the table, the participants motivated each other. The discussion became more and more animated, everyone got louder and louder.  There were true believers at the table.

Highlights of the conversation:

  • Many ESG-focused advisors report clients come to them with the intent of investing in sustainable companies
  • When explaining ESG investing to clients, simpler is better. Clients often get confused with all the lingo and it can overcomplicate the topic.
  • Websites are crucial to educate potential clients on the benefits of ESG investing.
  • Social events are a great way to connect with potential clients and at the same time make an impact.

Key takeaways for strategies others have employed:

One firm has grown its practice and served its clients by not only managing financial investments, but also personal and social assets (skills, relationships, community) and tangible assets (homes, shared infrastructure, ecological systems). 

One advisor uses a more holistic approach. He doesn’t start by asking clients and prospects if they want to invest in companies that don’t harm the environment but instead talks with them in their homes about their families, their children, grandchildren, and interests.  He then asks the prospect if they want to invest in a future that is good for their grandchildren and invest in other ways that support their values.

Another advisor talks with clients and prospects about envisioning their assets in buckets, looking at broad markets: public markets, private equity, microfinance, housing bonds and other community investing opportunities.

Many of the advisors present agreed that the majority of advisors from the smaller brokers such as a Raymond James to the giants like Merrill Lynch do not understand or practice values-based investing. In fact, the table’s participants believed that traditional brokers and advisors tend to talk their clients out of SRI/ESG investing.

One advisor prefers to use clear, simple one-page documents covering a single ESG theme. There are many themes that fall under the SRI / ESG umbrella, so it’s useful to have material that can address a single issue to make it easy for the investor to comprehend.

Another participant discussed advisor and individual use of the new Morningstar Sustainability Rating that measures how well the companies in a fund’s portfolio are addressing the ESG issues they face in their businesses. While not a perfect measure, it is a good indicator for advisors or individuals who don’t have the time or expertise to do their own research.

Are you looking for even more ideas and strategies for discussing SRI/ESG investing with clients? Follow our blog, Sustainable Investing (SRI) Ideas & Strategies.

Read 278 times Last modified on Wednesday, 06 June 2018 11:05
Tuesday, 05 June 2018 14:44

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