So you’ve seen study after study showing that investors are overwhelmingly interested in sustainable, ESG, and impact investing, but you think it might just be hype because your own clients aren’t asking about it. Right?Well, I have some news for you- most clients aren’t asking about ESG and impact because they don’t know it’s a possibility. The studies linked above explain to the participants what sustainable investing is before asking if investors are interested. If you want to know if your clients are interested, you’ll need to do the same.
You wouldn’t expect a client to come into your office and request a 10% allocation to emerging markets, or a portfolio with a beta of 0.9 to the S&P, right? Well you also can’t expect clients to know that having a suitable portfolio that resonates with their values is an option. As the financial professional, you must educate them on what their options are.
If you don’t talk to your clients about this, someone else will. But I’m not here to instill the fear of losing a client.
Here are five practical tips so you can get ahead of the game and have that conversation with your clients, even if you don’t currently offer a sustainable, ESG, or impact investing solution in your practice.
1. You don’t have to know everything to start the conversation.
You also don’t need to have an ESG / Sustainable / SRI / Impact Investing offering yet. You do have to be prepared to create an offering in the event your clients are interested.
2. Get educated on the basics.
3. Keep learning and stay up to date.
4. Have the conversation!
Below are some sample script ideas for you to consider:
5. Ditch the lingo.
When you’re speaking with clients, don’t use financial services lingo. In the same way that most clients don’t know what standard deviation means, most don’t know what ESG stands for; this Allianz study shows only 15% know that term.
You’ve got this! Now go have that conversation and bring another level of depth and connection to your client relationships!Related: Can Indexing Have Impact?