Scott Trager: We followed up this poll with a study that set out to reconcile perception and reality. The study examined performance data from over 10,000 mutual funds and nearly 3,000 separately managed accounts over the last seven years and compared those that were self-identified as sustainable investing strategies to traditional strategies. What we found was that in 64 percent of the time periods examined, the sustainable strategies met or exceeded the median return of traditional strategies.
This study addresses performance concerns head on and allows the financial advisor to confidently engage with clients who are asking for investing with impact or offer the opportunity to clients who are not actively asking for it, but may want to have a conversation about aligning their investments with their personal values. The Investing with Impact platform allows advisors to connect with clients at a deeper level, which is resonating with both throughout the firm.
Ellis: What about advisors who say “Why should I integrate something new into my already successful business model”?
Scott Trager: I would repeat what a financial advisor that I deeply respect recently told me, “If you stop evolving, you stop growing”. An important trait of successful financial advisors is their ability to innovate and evolve their practice as the world and their clients’ needs and goals change. Leading advisors are seeing this as an opportunity to evolve and grow their business.
Paul Ellis founded Paul Ellis Consulting to work with financial advisors who want to integrate sustainable and impact investment strategies for their clients. Lily Scott Trager is the director of investing with impact at Morgan Stanley Wealth Management.