As more millennials become educated, employed and in need of financial advice, many are looking for financial advisors who offer responsible investing (RI). Younger clients have shown an interest in working with advisors who can factor social and environmental considerations into their investment decisions.
Millennial investors want to be given information that’s grounded in facts and verifiable data. “They’re information-hungry,” says Tyler Field, financial advisor at Starboard Wealth Planners in Halifax. “They’re probably hungrier than the industry is ready for.”
Here are four tips on how you can appeal to socially conscious millennials:
1. Be upfront
Don’t be afraid to admit that your knowledge of RI may be somewhat limited. RI is a vast and evolving field, and no one can be expected to have all the answers.
“It’s OK to say we’re in the early stages,” says Fred Pinto, senior vice-president and head of wealth management at Qtrade Financial Group in Toronto.
Young prospects will appreciate honesty and are more likely to trust you than someone who pretends to have it all covered, Pinto says.
Jackie Ramler, portfolio manager with Raymond James Ltd., says her bachelor’s degree in environmental science has helped her understand RI to a certain extent. “My undergrad degree gave me that foundational language,” she says. “But a lot has happened in this field since I graduated.”
2. Practise what you preach
Hold yourself to account and follow the values that guide your approach to RI. If you do not demonstrate the role those principles play in your own life, you risk appearing opportunistic.
“We promote many green principles in our business,” Ramler says.
For example, take steps to minimize your team members’ footprint at work. Make it a paperless office; implement a composting and recycling program; install energy-efficient lighting.
Ramler belongs to several environmental associations. “It’s at the core of who I am,” she says. “It’s where I put my time and energy.”
3. Don’t rush the discovery process
Avai Kochanoff, financial advisor with Starboard Wealth, recommends “a good, long discovery process.”
Take time to understand how you can build a portfolio that best aligns with your clients’ values.
You may have up to three meetings, she says, before millennial clients sign the paperwork that formalizes your relationship. Find out what environmental, social and governance issues matter most to your clients before recommending investments. In Kochanoff’s experience, millennials often choose to invest in companies that are engaged in the communities they work with.
“[Millennials] want more than returns,” she says, citing a client who took an interest in a company that offers microloans to budding entrepreneurs.
This is the second part in a two-part series on responsible investing. Click here for part one, which provides suggestions on starting to incorporate responsible investing into your practice.
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