The rise of populism, the weaponization of social media and the escalation of geo-political tensions have fomented a level of political, social and environmental activism not seen in half a century. Everyone has an opinion and everyone wants their voice heard: including investors.

At the same time, rapid technology innovation guarantees the pace of change across financial services will accelerate.

In 2020, increased activism and new tech will drive three trends every investor and financial advisor should heed:

1. Values-Based Investing Will Continue Its Rise

According to Morningstar, estimated flows into open-end and exchange-traded sustainable funds reached $13.5 billion through September 2019. As a piece of the fund industry, which is measure in the trillions of dollars, it’s small. However, it’s a huge leap from the $5.5 billion invested in these funds in all of 2018.  That’s a growth rate of more than 150%.

Citizen activists are also investment activists. Their commitment to walking the walk to assert their values in everything they do is a harbinger of further momentum in environmental, social and governance (ESG) investing. The number of categories that help investors align their financial commitments with their values continue to expand. Today, the average individual investor can easily direct their assets to companies that demonstrate active commitments to racial justice, disability inclusion and reducing greenhouse gases or divest existing holdings from weapons, tobacco, the prison industrial complex and fossil fuel producers.

Financial advisors, institutions and pension management firms that are not developing, articulating and executing an ESG strategy to meet the needs of this new class of values-based investors put their short and long-term client base and financial performance at risk.

2. The Shift To Customized Investment Portfolios Will Accelerate

Technology today offers investment advisors the ability to customize investment portfolios at scale. Harnessing the power of algorithms, financial data and indices, Dynamic Custom Indexing (DCI) is a dynamic separately managed accounts (SMA) engine that replicates indices by directly purchasing the underlying stocks. The software maps the correlations across the balance sheets of all the tradeable securities in the selected universe. It allows custom changes to be made to the portfolio. It then responds dynamically by breaking apart and rebalancing the portfolio in-real time, ensuring tight tracking of the index.

Investment advisors can rent DCI capabilities from the cloud and use them to buy, manage and transact client investments in real time at the individual security level based on client goals, situation and values. Using any connected device, advisors input their strategic allocation mix, overlay the client's values, select tax optimization, show the client the suggested portfolio, and hit “Go.” DCIs do the rest, including systematic account management and customized reporting, while dynamically adjusting the portfolio based on market conditions. This paves the way for advisors to be more hands-on directly with their clients, while the software does the heavy-lifting on the task-oriented portion of the value they provide.

3. ESG Investing Will Power Tighter, Friendlier Advisor-Client Relationships

Like doctors who made house calls in days of yore, investment advisors used to enjoy very tight relationships with their clients: frequent in-person and telephone communications underpinned a relationship akin to close friends. In the last 20 years, however, technology intervened in a big way. Actively managed funds were commoditized into passively managed index funds and exchange-traded funds. Algorithms, A.I. and cheap data have effectively replaced the role of advisors, creating tremendous price pressure and driving advisor fees to near zero. Automation de-coupled the advisor from the client in many ways: what used to be close friendships evolved to purely transactional relationships: “Markets are destabilizing. I recommend you shift X to Y. Permission to proceed?”

The arrival and momentum of ESG investing allows advisors to reclaim tighter relationships with their customers. It invites a conversation about clients’ very personal values. Ironically, technology like DCI now enables improved advisor-client relationships rather than undermining them. DCI empowers advisor and client to work closely together to steer client assets in alignment with their values. It opens the door for advisors to elevate their conversations with clients to a more personal and meaningful level while providing clients a better sense of agency over how their resources will be allocated to match their personal views. It paves the way for the rebirth of the “best friends” advisor-client relationship at a time when it’s needed more than ever.

Next year promises turbulent times in society, politics and the financial markets. It’s a good time to remember our values, invest in them and remind ourselves: we’re all in this together.

Josh Levin is chief strategy officer and co-founder of OpenInvest, a registered investment advisor and public benefit corporation leveraging technology to provide a next-generation impact investing solution.