Sustainable investing provides a clear opportunity to engage with the families you work with and create deeper, more meaningful intergenerational relationships.
Baby boomers are positioned to pass roughly $68 trillion in assets to Generation X and millennial family members over the next 25 years. And there are now countless studies and surveys published indicating that, put simply, people are interested in sustainable investing.
According to a Nuveen study of 1,000 investors who work with advisors, 68% of them said they would be more likely to stay with an advisor who discusses sustainable investing. And yet, in February this year, Wells Fargo polled investors and found that only 12% surveyed said they have heard about sustainable investing from a personal financial advisor.
There is a clear gap between investor interest and advisor support with sustainable investing.
Advisor adoption is happening, albeit slowly. In 2017, 41% of the Financial Times 300 top RIAs and 400 top broker-dealer advisors polled by Ignites Research used ESG products or ESG ratings, or both. In 2019 that figure jumped to 69% of advisors. Cerulli data shows that 58% of high-net-worth advisor practices use ESG and socially responsible investing (SRI) strategies and will increase their allocations over the next year, and 8 percent plan to introduce these strategies in the next 12 months.
We’ve seen consistent growth on the Envestnet Impact Platform over the past 12 years, and in 2019 we saw assets jump 97%. Our recent analysis shows that advisors invested in impact-focused strategies had, on average, larger books of business, higher inflows, and higher net flows on both a three-month and twelve-month basis compared to advisors not invested in impact-focused strategies.