NEI Investments National Director, ESG Practice Management, explains how advisors must look within to find the purpose that will not only drive your strategy but connect with clients
When Asmita Kanungo talked to WP, virtually, there was a constant on my screen – her surfboard. Not only was that a neat segue into her approach to responsible investing (RI) but it illustrated why investors must be able to articulate, in an engaging way, their practice’s purpose.
Kanungo, the National Director of ESG Practice Management at NEI Investments, loves to surf, enjoys the water and cares deeply about the environment. Not only did she leave me wanting to know more about her hobby but also how that informs her investment philosophy.
This ability to engage is critical to every advisor, particularly those advocating RI, because clients are increasingly looking to invest with purpose. They want to know what an advisor stands for and why.
Kanungo has built out a practice management program called Impact Advisor. The program consists of one-on-one consultations, workshops, tools and resources that covers three main areas: purpose, RI portfolio construction, and client relationships. In a series of three articles, we explore each area in turn, starting with establishing your practice’s purpose.
Having a sense of direction is nothing new, of course; it goes back centuries. If clients have satisfied their basic needs, like food, shelter and safety, in order to achieve further self-fulfilment they want to make a difference to our world, and view products and investments through that lens.
We are seeing an increase more recently of people demonstrating their purpose such as cleaner environment and social justice. Examples such as the Black Lives Matter movement, climate protests started by Greta Thunberg, and excess executive pay are just some examples.
Advisors must demonstrate, therefore, that they go beyond simply helping clients grow wealth and are committed to helping them have an impact, too. Kanungo believes that in order for an advisor to establish that connection with a client, they have to be able to articulate that mission statement. Advisors can demonstrate this alignment by offering responsible investment but they first must be able to articulate their sense of purpose.
What’s your purpose?
The first step is to determine why they are interested in responsible investing in the first place. Is it to ensure your children’s future? Is it based more on returns? Is it to preserve our planet?
“Once you have that, it acts as the guiding light to your true north in how you're going to direct your business,” Kanungo said. “If, as an advisor, my purpose is to help the environment, then I'm not going to invest in certain things that would harm it. My purpose, therefore, is not only to help my clients achieve long-term returns, but to give them the power to make important decisions around the environment.”
Defining this sense of purpose also enables advisors to differentiate themselves from their competition. An advisor who is driven by a desire to integrate RI into clients’ portfolio, who can market that and who walks the walk will feel like the real deal versus a professional whose commitment to the space is unclear.
Kanungo said: “As an asset management firm, when we do research on companies, we want them to be talking the talk and walking the walk. Investors are looking for the same thing with their advisors.
“As they are going to read and hear more, they will get more educated in this space. They will start asking the question, is this advisor just wearing a sticker that says ‘I’m a responsible investment advisor’ or are they truly doing this? When you have that set purpose, you will end up demonstrating it because it's the guiding light for your practice.”
Not only will that add to your authority but it will attract like-minded people to your practice and allow you to scale. Find your purpose and distinguish yourself from your competition.