Differentiate Yourself while Meeting Client Needs with Socially Responsible Investing

Posted by Pete Muckley, VP of Marketing on November 5, 2015

Socially responsible investing, or SRI, has become increasingly popular over the last decade. More and more mainstream money managers are incorporating social and environmental factors into their investment decisions in response to the demands of investors who want to own companies that share their values.

From 2012 to 2014, for example, SRI assets increased 76%, according to the US SIF Foundation. The total of SRI assets at the start of 2014 was $6.57 trillion. These assets now account for more than $1 out of every $6 under professional management in the U.S.*

While more and more investors are asking for socially responsible investing solutions, many advisors may be overlooking this opportunity. A recent survey indicated only about 49% of advisors offer SRI as an option.**

Advisors may think the investor has to sacrifice performance to accommodate SRI, but studies show that doesn’t have to be the case. A 2011 study by GMI Ratings found that “on average and in aggregate, socially responsible investment portfolios perform comparably to conventional ones.”***

SRI allows investors and institutions to create portfolios that reflect their personal, social and environmental values by avoiding certain stocks, such as those in the firearms, gambling, military weapons, nuclear power and tobacco sectors. By excluding these types of holdings from their portfolios, socially responsible investors seek to meet their financial goals while ensuring their personal investment decisions have a positive impact of people and the planet.

Many advisors are looking for a rewarding and growing niche to which they can target their services. Offering SRI strategies might be an attractive way for you to differentiate yourself in the marketplace. You could position yourself as the go-to advisor for socially responsible investing in your community.

To investigate this idea further, visit the website for the Forum for Sustainable and Responsible Investing (US SIF). This resource offers an online course for financial advisors ($300) that results in a certificate and qualifies for CE credits.

In looking for new opportunities for growth, advisors may want to consider targeting the growing number of investors who want to integrate their personal values and societal concerns with their investment decisions.


*US SIF Foundation, 2014 Report on US Sustainable, Responsible and Impact Investing Trends.

**“First Affirmative Survey on the Views of Financial Professionals on SRI,” First Affirmative Financial Network, October 23, 2014. Survey of 1,913 advisors.

***“Ten Things to Know About Responsible Investment & Performance,” GoveranceMetrics International, Inc., March 16, 2011.

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