Even as investor interest in sustainable, responsible, impact (SRI) investing soars, 60 percent of financial advisors still express little or no interest in the area, according to Theresa Gusman, chief investment officer for First Affirmative Financial Network, a firm based in Colorado Springs, Colo., that specializes in SRI investing.

Women and millennials are particularly interested in SRI investing, and are a large untapped population for advisors, she said. Gusman was a keynote speaker at the Invest In Women conference sponsored by Financial Advisor and Private Wealth magazines. The conference is being held in Houston.

Statistics suggest SRI is an opportunity for advisors, Gusman said. Fifty-three percent of wealthy women have no financial advisor, and at the same time, 90 percent with at least $500,000 in assets say they are interested in SRI investing. Eighty-four percent of women in general say the same thing, as do 86 percent of millennials.

“We have to close the gap between those expressing interest and the actions they take,” Gusman said. “This is a misunderstood and underserved population.”

Advisors always want to know how to differentiate themselves from the competition. Gusman urged the advisors in attendance to “target female and millennial investors. Engage both their heads and their hearts in your discussions.”

The SRI investment market is largely fragmented, making it difficult for an advisor to offer a broad range of investment options, but technology is being developed to solve that problem. Advisors should use that technology to offer their clients possibilities.

Even before technology was as robust as it is now, good research and analysis of companies could reveal potential, ftuture problems that hurt the communities where they were located and eventuallty hurt the companies' bottom lines.

Before the BP Deepwater Horizon oil spill in the Gulf of Mexico in 2010, due diligence revealed that BP was cutting costs at the expense of safety, Gusman saw this and recommended dropping BP investments before the spill happened. The company’s stock plummeted by 55 percent after the spill.

Likewise, Gusman saw social unrest in countries where many paaper and pulp companies were located, in part because of poor production practices that hurt the communities. She recommended dumping invesments in those companies with bad business practices and retaining ones that had good business and employee practices, and the companies with good business practices made profits.

“There is a false perception that there has to be a trade-off between good returns and successful SRI investment practices,” she said, but promoting good environmental and social practices can also bring good returns. “Studies have shown that SRI investing meets or exceeds the returns of traditional investing.”

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