Advisors are facing two industry revolutions: First, clients have embraced technology faster than the financial services industry can keep pace with it. They now control the relationship with their advisor and demand 24/7/365 access to advice and their portfolios. This transformation is challenging advisors to deliver value in a highly commoditized industry.
Second, the same clients seeking digital engagement also want more sustainable, responsible and impact (SRI) investment options. No longer a fringe idea, SRI investing is increasingly popular with clients across every demographic – men and women, old and young, novice and expert alike.
Advisors have a tremendous opportunity to meet clients’ interests in digital engagement and portfolios that have a positive effect on the lives of others. However, with so many technology and SRI choices in front of them, many advisors feel like they’re drinking from a fire hose. The SRI space now offers more products than ever before, and these products – along with clients’ needs – are not one-size-fits-all.
Advisors should view SRI as an opportunity, and technology, such as a flexible brokerage platform, a model management program and robo-advisor tools, as a facilitator. SRI and technology allow advisors to work with clients on a deeper level and have conversations beyond “when do you want to retire?”
Sustainable, Responsible and Impact Investing Today
In the early days, few embraced SRI investing, with most strategies geared toward excluding certain investments from a portfolio. Over time, non-financial data and analysis – often referred to as environmental, social and governance (ESG) factors – grew to include companies that demonstrated high performance in corporate governance, environmental sustainability and diversity.