As financial advisors, you serve a greater good – the financial well-being of your clients. You are tasked with anticipating global opportunity and navigating change while striving to exceed your clients’ expectations. It is a tremendous responsibility with exceptional rewards. Advisors can be found among a family’s most trusted relationships, participating in critical decisions and providing the dual blessings of wealth: freedom and security.
We find a growing number of clients seeking to align their investments with their values. For financial advisors, this trend coincides with the rise of impact investing, a market with the potential to reach $1 trillion by 2020, according to JP Morgan and the Global Impact Investing Network.1 Impact investments are investments made into funds, companies, and organizations with the intention to generate measurable social, economic, and environmental impact alongside a financial return.
Industry studies indicate that developing an impact investment offering is a critical element to better meeting the needs of your clients. According to the US SIF 2012 Report on Sustainable and Responsible Investment Trends in the United States, 72% of advisors stated that fulfilling client demands was the top reason they are incorporating environmental, social and corporate governance factors into their investment analysis.2 According to the U.S. Department of Education, women control 60% of wealth, and their numbers are growing at twice the rate of men’s – prompting estimates that by 2030, women will control two-thirds of wealth in the U.S. In the U.S. Trust study, 65% of women respondents believe it is important to view investments through the lens of their impact on society and the environment.
Figure 1: Reasons for Incorporating ESG Criteria into Investments, % of Money Managers Surveyed