Responsible investing has more than quadrupled over the last three years, to $622 billion in assets under management (AUM). Nearly half (44%) of Australia’s assets under management are now in some form of responsible investment strategy.
The apparent knock-on effect for financial planners is that more clients want to invest money in ethical organisations that match their own values and interests, such as ethical farming or companies that build clean energy infrastructure or myriad other environmental and social justice causes.
Demand equals opportunity
This rise of ethical investing is emblematic of a broader consumer trend affecting all sales and marketers. Clients today care about a company’s standards and behaviours when considering buying from them, whether it’s financial planning services or hamburgers. More consumers want to know that the organisations they are buying from are ethical in their practices, are environmentally sensitive, respect the communities that buy from them, and will actively ‘do the right thing’ by their employees.
There are oodles of examples of where a business has been crucified in the media or online when failing to meet these standards. Social media can be swift in its condemnation of businesses that slip up, which means one mistake can be fatal. A recent study found that four out of five Australians would switch their super or other investments if a company failed to meet their values. The flipside is that more people want to invest their money in businesses that excel ethically.
Use it as a marketing tool
I’m sure many of you are already aware of the ethical trends and the broader focus on issues that many companies bundle up under the banner of corporate social responsibility (CSR).
If you have a CSR program, you should promote it to your clients. If you don’t, working some social responsibility into your marketing strategy and sales approach could prove a valuable new business tool, as potential clients will want to know you can offer them investments that match their values.
Moreover, offering insights and access to ethical investing can become a part of your firm’s CSR program. It shows that your business supports ethical investments, which it appears more clients are seeking to include in their portfolios.
That just seems like good business in my book.
