Andrew Friedman Shares Marketing Best Practices for Impact Investing Services
The demand for sustainable and responsible investments is growing, and many financial advisors are looking to meet this need by getting involved in the SRI space.
With so many myths circulating about what SRI really means, though, and whether these investments actually pay, advisors new to the space may be wondering how to market their impact investment services. We spoke with Andrew Friedman, President and Founder of AJF Financial Services and sustainable investing guru, to get the scoop on his marketing best practices.
1. What do you think is your clients’ most misunderstood notion about SRI investing?
People still don’t understand that it’s not solely about exclusionary criteria anymore. Decades ago, the practice was much more focused on avoiding particular industries, like firearms and tobacco. But over the last 40 years, ESG investing has evolved into an inclusionary practice to find good companies while avoiding ones making bad business decisions. These days, we also want to focus on companies that are doing right not only by their shareholders, but by the community, environment, supply chains and employees. That’s what SRI is about, a world that works for everyone and having corporations be responsible for all stakeholders.
2. Do your clients ever worry they have to sacrifice performance for the good of a socially responsible investment?
Absolutely—this is one of the most prevalent myths we always have to address. More and more, we are proving that’s not necessarily the case. For example, there are lots of large cap stock funds. Investing responsibly doesn’t mean you aren’t using large cap stocks in sustainably screened funds; all you’re doing is looking for bad decisions within the companies’ culture and avoiding them. To me, that’s a risk management tool as much as anything else. If you’re avoiding problems, you’re likely creating long-term value. The good news is that an increasing number of corporations are embracing this and trying to do the right things.One problem we face is our clients’ inherent lack of trust in corporate America. I got tired of eyes rolling and hearing “why would I want to invest in that?” But my clients know I’m looking out for them and doing the research for them. It can be tricky, because in the financial services industry in particular, people are hesitant to change. Even small things, like going paperless—my firm encourages our clients to go paperless, but if we could convince broker/dealer firms to follow suit, perhaps it would be one small step in the right direction.
3. What is your biggest piece of advice to advisors who are getting into the SRI space?
Do an internal audit first. Look at your own processes before you go and talk to anyone else about theirs. We couldn’t suggest our broker/dealer go paperless if we weren’t already doing it ourselves. In this industry, just like in everything else in life, it’s important to practice what you preach.
4. What is the most important question you ask your clients?
For me to best serve my clients, I need to know what is most important to them about the way their money is managed.
5. What’s the most effective marketing you are doing now?
I have always been more old school and relied mostly on referrals for new business. However, my firm now has someone managing our social media strategy. We regularly post to Facebook, Twitter and LinkedIn with timely articles, and we’ve gotten a number of referrals coming in from these social platforms.
We regularly buy ad space in brochures for foundations we feel comfortable supporting, which has helped to get us noticed. Our message is always that ethical investing does not necessarily lose money, and we perform just as well using ethical standards.
7. Are there other tools you would like to learn about?
I’ve always been a referral guy, so I let myself be my best marketing tool, but I’m always open to learning what else is out there.
8. Are you improving the sales process with your websites? How do you get around the compliance issues in creating an effective website? Are you producing articles for clients and prospects on the variety and profitability of SRI investments?
We write about what we see. Our content is always ESG-related, but we also occasionally send out articles written by outside experts. In regard to compliance, we have never encountered any issues as long as we use proper disclosures on all of our online properties, including social media.
9. Are you sharing your thoughts with the news media?
I currently don’t proactively pursue the media, but I am always willing to talk to journalists when they call me. I am not averse to publishing thought leadership, but my time is devoted to serving my clients, so at the moment any media campaign is a question of time for us.
10. Are you using e-mail campaigns?
We write and distribute e-mail content for our current clients, which they often share with their personal networks. At this time, we don’t use e-mail campaigns to elicit prospects.
11. What kinds of hard-copy material are you giving clients?
We have a brochure that we hand out to our clients, and we always direct them to our website and Facebook page for additional information.
12. Are the manufacturers of the investment products helping you build your businesses?
We don’t receive anything physical from manufacturers, but they do help us by providing information on their products, which we can share with our clients.
AJF Financial Services, based in New York, was founded in 1991 and provides comprehensive financial planning services to individuals, businesses and professionals with an emphasis on sustainability and impact investing. To learn more about AJF Financial Services, visit their website here.
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