Sustainable Investing: An Opportunity to Attract in New Assets

If you are a financial planner who hopes to retain multi-generational client relationships, you need to embrace ‘sustainable investing’ now. This should be relatively pain-free since it no longer requires sacrificing returns.
Data over a seven-year cumulative basis shows that there is no degradation in performance whatsoever. This is reflected in the impressive size of the sustainable investment market—tripling in value over the last seven years and is now worth $6.2 Trillion. This growth in popularity has been so dramatic that it’s safe to say that financial planners could stand to lose clients if they do not develop investing skills using environmental, social and governance screening criteria to offer products to their clients. Look for companies that offer funds that screen for specific sustainable attributes so that you have a plethora of options to offer your clients.
Unsurprisingly, the newest generation to enter into the accumulation stage—Millennials express the highest interest in sustainable investing out of the investor groups. Financial planners who do not offer these services and products to these groups are likely to lose clients over time as the millennials make and inherit sums of money. It’s become prudent to make sure you’re offering products that satisfy these desires of specific investor groups as time goes on.
Larger firms that are not offering these products and services may be missing out—studies have shown that sustainable investment analysis is becoming increasingly predictive of out-performance during the longevity of the investment.
Many financial advisors who are not currently offering sustainable investing strategies often do not offer these services because they feel they need to wait for clients to bring up the subject. However, this presents a problem, as many clients often don’t know these products and services are available.
Sustainable investing is quickly becoming a required service—it allows financial advisors a way to differentiate themselves from their competitors, and it’s a huge opportunity to procure assets for your clients.