Why are advisors ignoring client demand?

Why are advisors ignoring client demand?

Why are advisors ignoring client demand? Despite the growing number of investors expressing interest in environmental, social, and governance (ESG) investments, certain financial advisors seem reluctant to include such offerings in their practices.

In an interview with Financial Advisor HQ, Money Management Institute CEO Craig Pfeiffer said many advisors have not demonstrated any interest in learning more about ESG investing. He related the trend of impact investing to the time when real estate was being introduced into traditional stocks and bonds. 

"Applying these principles around impact investing, the whole sustainable investing initiative is really based on enabling advisors to have a conversation with their clients," he said.

Pfeiffer said it is important for advisors to know about their clients, their values, and how they live their lives in order to know if ESG would be appropriate to them.

"I actually think about sustainable investing and impact and the principles and the ESG elements of portfolio construction as a way to express those values in an investment way," he said.

This goes to show how impact investing is not some sort of flash in the pan. The important thing, as Pfeiffer puts it, is for advisors to make the effort to know more about ESG investing and how they can help their clients gain access to it.

"And I think this is one of those cases where, as information becomes available, that creates education, becomes competency, which ultimately leads to confidence. And there is always going to be early adopters, there’s going to be rabbits out front, and there’s always going to be people that stay back and watch," he said.

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