Sponsored by Parnassus Investments
As increasing numbers of clients seek to align their investments with their values, it’s important that you let them know you can help. Clients who feel that their portfolios express their views and contribute to constructive change are likely to feel better about their investment choices, which can help you cement your relationships for the long term.
Keep It Simple
There’s no reason to add complexity to your business by creating new processes for responsible investing. Simplify the work of integrating ESG options into your offering by incorporating responsible investing considerations into the steps you already have in place to build your practice.
Build Your Expertise
Become familiar with ESG topics, including the evolution of ESG investing, various approaches to implementing socially responsible strategies and performance trends.
"My approach to clients about sustainable and responsible investing was to offer them the opportunity to realize their financial goals while staying true to their values." – Paul Ellis, Paul Ellis Consulting
Find Out What Motivates Your Clients
Begin with your best clients—those with the longest history or highest AUM. Also focus on those with adult children who are interested in ESG.
Profile your clients by finding out what causes they support with donations. Learn what types of products they purchase—for example, hybrid or electric cars, solar panels or fair-trade products.
Ask your clients to complete an ESG questionnaire, such as the one available on parnassus.com, to learn more about their specific responsible investing interests.
"The transformation of our practice began when we started talking to clients and saw how passionate they became about this type of investing and how their investments are positively impacting the world." – Marci Bair, CFP® President, Bair Financial Planning
Don’t Wait for Someone to Ask
Bring up the topic of ESG goals during your established discovery process, at annual meetings, when discussing life events, in correspondence or any time money is in motion.
You may open the discussion with current events, media articles and topics related to the client’s personal preferences. Share specific company examples to make the concept of sustainable investing more tangible.
Here are sample questions you can pose to kickstart the conversation:
- Do you believe it’s important to invest in companies that are ethically run?
- What themes are you interested in supporting?
- Is it important to you to invest in companies that strive to make positive changes in the world through their products or services?
Be Ready with Solutions
Do your research on responsible investing strategies and be prepared to offer some choices to your clients. Morningstar’s assessments of funds’ ESG commitment levels are one good place to start your research.
"We believe it's important to put the client at the center of the discussion, to engage with them beyond the quarterly statement and identify their value priorities." – Managing Partner at Bair Financial Planning, Victor Orozco, CSRIC™
Visit the practice management page on parnassus.com and sign up for more information.
Parnassus Investments partnered with Paul Ellis, who is a nationally recognized expert on sustainable investing and was an advisor at Ameriprise for 23 years. Paul works with advisors to integrate ESG into their practice and helps them capitalize on the growing business opportunities in the transition to a low-carbon economy.
Founded in 1984, Parnassus Investments is an investment management company based in San Francisco, CA. The firm invests responsibly to build wealth for its clients by selecting businesses that the investment team believes have increasingly relevant products or services, sustainable competitive advantages and quality management teams for their high conviction portfolios. Every investment must meet rigorous fundamental and environmental, social and governance (ESG) criteria.
Parnassus Investments offers resources to advisors to serve their clients and help them invest responsibly.
©2021 Parnassus Investments. All rights reserved.
The Parnassus Funds are underwritten and distributed by Parnassus Funds Distributor, LLC.
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE GUIDELINES The Fund evaluates financially material ESG factors as part of the investment decision-making process, considering a range of impacts they may have on future revenues, expenses, assets, liabilities and overall risk. The Fund also utilizes active ownership to encourage more sustainable business policies and practices and greater ESG transparency. Active ownership strategies include proxy voting, dialogue with company management and sponsorship of shareholder resolutions, and public policy advocacy. There is no guarantee that the ESG strategy will be successful.
There are no assurances the Fund’s investments objectives will be successful. Mutual fund investing involves risks, including the potential for loss of principal.
