3 Ways Values-Based Conversations Can Enrich Client Relationships

1. It lets advisors and clients have the right conversations.

Advisors are known for playing “20 questions,” and values-based investing is an area where clarity is exceptionally important. There may be times when opportunities arise naturally in everyday conversations, but that’s not always the case.

Asking broadly about values and beliefs can be complicated, not to mention challenging for the client to articulate. Instead, some ways to approach the conversation might include:

• Use values cards that depict visuals of priorities like family, travel and technology. You ask clients to lay out these cards based on priority and describe what the image means to them. This hands-on approach can help provide clarity to otherwise abstract ideas.
  
• Build an impact questionnaire that walks clients through a variety of investment types and asks for their feedback on what they would like to focus on or avoid; running through such a list can evoke more responses and ideas than asking a single, broad question about values.
  
• Leverage internal and external resources that might exist within your firm, among peers or through industry trade groups; tapping a person or resource with extensive values-based investing experience can be invaluable when getting started in the space.

2. Advisors can treat values-based investing as individualistic.

Just like the values themselves, values-based investing is hyper-individualized. Investors have a spectrum of methods to align their portfolios to their values, from exclusionary screening to seeking measurable results.

For example, your clients may be passionate about the risks behind social media and children’s data privacy, but what does that mean for their investments? Does your client want to avoid companies making the chips that power smart devices?

That would exclude a wide swath of the S&P 500. Maybe it makes more sense to invest in companies that are engaging in better security and protections instead.

Issues can quickly become layered and nuanced, and it’s up to advisors to figure out what clients are comfortable with in terms of risk, and then provide them with information that can help them make these decisions.

In another instance, a client recently learned of her father’s lung cancer diagnosis. During an emotional discussion with her advisor, she said she wanted to make sure she wasn’t investing in products that could be causing cancer, and the associated pain for families.

She’s not alone. According to the same Gallup poll, 68% of investors say they’re likely to avoid stocks that contradict their values.

On the other end of the spectrum, clients can pursue investments that are generating measurable outcomes in areas they care about — in this example, perhaps companies that are developing innovative treatments for lung cancer.

3. It can help advisors bridge generational gaps.

Data shows that millennials and Generation Z are interested in how they make their lives align with their values and purpose as a person. But it’s interesting how important it has also become for generations who are considering a future transfer of their wealth to heirs.

Clients want assurances that their wealth will be used responsibly by the next generation and in harmony with the ideals that shaped their lives.

Advisors have an opportunity to help be that generational bridge by involving heirs early in investment and legacy conversations. This can be both informally through family meetings and formally through leveraging ethical wills and legacy letters to coincide with inheritances.

Ultimately, values-based investing boils down to thorough client discovery and talking to clients about all their goals — not just their financial ones. Really listen to the events that have shaped their lives and the distinct experiences that play into what’s important to them.

Guiding clients to invest in alignment with their values isn’t just good business but can also enrich client relationships. It’s a strategy that supports clients in achieving their financial goals while also helping them to feel that all aspects of their life are in balance.

Samantha Trebesch is senior vice president, head of sustainable investing for the Private Client Group of Raymond James, a Florida-based investment bank and financial services company.

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