Enhancing client communications is a challenge for most financial advisors but sustainable and responsible investing adds an extra twist. How can you get clients to embrace their SRI instincts without going too granola on them? And how do you give SRI-committed investors enough information without saturating them with news they may be receiving from other sources?
Start an SRI conversation with clients when you initially meet them even if they don't bring up the subject, suggests Steve Schueth, president of First Affirmative Financial Network. FAFN, an independent registered investment advisor that specializes in serving socially conscious investors, supports a nationwide network of financial advisors.
Although the majority of licensed financial professionals are overlooking or avoiding discussion of SRI-related values and priorities, "talking about things at the heart level is where you really connect with clients and build a deeper level of trust" and loyalty, says Schueth, whose organization addresses client communications at its BaseCamp SRI conferences for financial advisors.
To jumpstart this conversation, ask clients if they wish to stay away from any industries, he says. Then ask how they feel about traditionally avoided areas like "sin stocks" (alcohol, tobacco, and gaming companies), nuclear power, weapons manufacturers and egregious polluters. "It's easier to say what you don't want than what you do," he says.
Next, ask clients what they'd like to own more of-then keep your eyes and ears open, says Schueth. Have a client who's passionate about clean water? E-mail her an article on the subject, following up to check if she found it interesting and if she'd like to receive more. Heard a speaker is coming to town to discuss an issue that's a hot button for some of your clients? Invite them to accompany you to the presentation, he says.
Several good ways to learn more about SRI issues, says Schueth: join the Social Investment Forum (www.socialinvest.org), visit SocialFunds.com, and sign up for a news-feed from Environmental Leader (www.environmentalleader.com).
Many financial advisors agree quality trumps quantity when disseminating SRI-related information. "We don't ping them with every news items that comes up on green. They have their own Wall Street Journal subscriptions so we don't think it adds a lot of value," says Jonathan Naimon, managing director of Light Green Advisors, a Seattle-based asset management firm specializing in environmental sustainability investing.
Instead, LGA focuses on sharing its original research with its predominantly institutional clients such as CalSTRS, the nation's largest teachers' retirement fund. LGA often shares information on industries, environmental factors important to shareholder value, corporate governance and emerging trends. "Institutions get reports every day of the year; we try to bring an integrated financial perspective to green issues like climate change," says Naimon, who wrote an analysis for clients on emissions reductions after the recent Copenhagen summit.
For 20 years, shareholders with Boston's Winslow Management Company have received the Winslow Environmental News, a quarterly eight-page newsletter. Its purpose then and now is to show how the environment and business intersect, says managing editor and Winslow's director of marketing Ethan Berkwits. "The key for us is keeping it education," he says. Each marketing-free issue emphasizes a different theme.
The newsletter, posted at www.winslowgreen.com, is e-mailed to the nearly 15,000 names on its subscriber list unless they've opted to receive paper copies. Berkwits is looking forward to an overhaul of the Web site this year which will eliminate the early deadlines and space restrictions of the newsletter's current PDF format and enable immediate posting of articles. "We were always reluctant to write about changing events that could be outdated," by press time, he says.
Winslow, which has $450 million in assets under management including the Winslow Green Growth and Winslow Green Solutions funds, also publishes periodic white papers for clients.
Laurie McClain, AIF, head of Socially Responsive Investment Advisors in Bellingham, Wash., and an investment advisory representative with FAFN, produces a two-page quarterly newsletter for her 60 clients. Occasionally, she sends e-mail blasts with eye-catching subject lines on what she deems "blast-worthy" topics. She also checks in with each of her clients four times a year, always extending an offer to meet in person.