I learned that 1.6 million people a year die from diarrhea, and over 80% of them are under the age of 5. This is due to unclean water, a problem that could be corrected in a few short years via proper infrastructure.
I learned that cybersecurity breaches cost over $2 trillion a year, and the leading victims are the elderly and retired. It’s hard for any of us not to care about these issues. Is it possible that we can care with our investment dollars and turn a profit as well? Is there a sweet spot between humans flourishing and profitability that is begging for our vigilance and participation?
What matters to you? What matters to your clients? How much longer can we ignore these questions or patronize the issue with superficial discovery questions like, “Are there any stocks or companies you’d like to avoid?” I don’t say this to denigrate the value of such a question, but to illustrate the idea that being against certain products (against “sin” stocks, for example) is valid, but the conversation will need, at some point, to move from “What are you against?” to “What are you for?”
The Time is Upon Us
I suspect that your clients are hungering for such a conversation right now. I suspect that today’s clients are keen on the idea of alignment between their personal values and account values. Are you ready to bring it?
One advisor who is ahead of the curve on this issue is Jeffrey Gitterman, who serves clients in the NYC and New Jersey area. Gitterman has emerged as a thought leader and a leading advocate in the ESG space. His clients are largely college professors, and they are amenable to aligning assets with their views. He has been bold and intentional, and in 18 months moved every dollar under management into the ESG arena. Not a single one of his clients said no to the idea.
“Eighty-eight percent of clients surveyed want to have this conversation, and only 6% of advisors are engaged in the conversation,” he told me. “What pool do you want to be swimming in? Where all of the advisors are and no clients are, or where all of the clients are and no advisors are present?”
I’ve tracked his career for many years and know he’s been very successful and that his key driver has always been the well-being of his clients. Maybe we could all learn something from his example. After all, when is the last time you presented an idea to clients that got a 100% positive and active response?
Righteous Profits, Happy World
It just makes sense to reward the companies that reward their employees, their communities and the world at large. Obviously, ESG screens cannot be agnostic to profits. But it stands to reason that if a company treats its workers, clients, communities and environment well, then profits would result. King Solomon, one of the wealthiest individuals to ever live, said in Proverbs 11:10, “When the righteous prosper, the city rejoices.” When business is done the right way for all involved, then all are somehow beneficiaries of the product or service well done. I heard a phrase at this gathering on values-based investing that I had never heard before: “investing that makes the world rejoice.” We’re all happy to turn a profit—we’d be all the happier to know that we turned a profit properly and on principle.
I had to do some soul searching myself. It boggles my mind that as a society we seek to align our values in almost every aspect of life, but we are largely impartial to this alignment with our hard-earned savings. We seek an alignment of values in how we raise our children, how we vote, who we work for, where we give our money, etc. Why wouldn’t we be just as adamant to seek our values through our investments as well? Imagine walking your child, at 18 years, to the front door and saying, “I don’t care how you do it, just go out there and bring back as much money as you can.” We would never act that way, but this is largely how we deal with our investments. In the past this mode of operation has been unwitting. That is no longer the case. From this point forward we will be either witting participants or willfully negligent.
This is a conversation that is just beginning. Awareness is growing. We would all do well to take the time to get educated enough to be able to translate the possibilities to clients and to give them investment choices that will do their souls some good … as well as their account balances.
Mitch Anthony is the creator of Life-Centered Planning, the author of 12 books for advisors, and the co-founder of ROLadvisor.com and LifeCenteredPlanners.com.