A new survey suggests that the old social investing mantra about doing well by doing good might apply to advisors who have experience and access to environmental, social and corporate governance (ESG) investments.
According to a new survey by TIAA Global Asset Management, the availability of ESG investment options through their workplace retirement plans would cause 71% of affluent investors to feel good about working for their employer.
According to the TIAA Global Asset Management survey (which offers ESG options), almost three-quarters of investors (74%) would be more likely to work with an advisor who could give them competitive investment returns from investments that also made a positive impact on society, and 65% of investors would be more likely to stay with an advisor who could discuss responsible investing with them.
Only 45% of surveyed advisors believe this would be the case, and often choose not to address responsible investing options with their clients. In fact, 61% of the investors surveyed indicated that their advisor had not brought up the topic of responsible investing in the past 12 months.
Millennial investors are more likely than non-Millennial investors (90% versus 73%) to want their investments to deliver competitive performance while promoting positive social and environmental outcomes, according to the findings from one of two online surveys fielded in December 2015 of 2,206 U.S. investors age 21 or older who were currently working with an advisor and had $100,000 or more in assets, excluding 401(k), 403(b) or real estate holdings.
While nearly one in four (23%) affluent investors believe responsible investing is only for the very rich, only 8% of some 275 advisors, surveyed separately, feel the same way. However, only about a third of investment advisors (36%) concede that they are not able to adequately evaluate performance of responsible investments.
Nearly three-quarters (74%) of advisors reported an interest in learning more about responsible investing options to better serve their clients.
Over half (51%) of financial advisors surveyed believe responsible investing does not provide the same rate of return as other investment strategies, while 57% of investors believe responsible investing offers a lower rate of return than other strategies.
