CHICAGO – When you have as much background in a topic as Sonya Dreizler does in impact investing it’s easy to see patterns and trends where others just see numbers.
Growing up as the daughter of Bob Dreizler, one of the first SRI investors in country, Sonya Dreizler, an independent consultant for financial services firms, grew up with a fundamental understanding of how impact investing would grow and what advisory firms would need to do to adapt to this forward-thinking and fast-growing approach.
One of her predictions for the future is that financial planners will pave the way for the adoption of SRI and ESG strategies in the financial services industry because of a strategic advantage planners have over financial advisors – their holistic approach.
“Some advisors shy away from having non-financial, values-based conversations with clients, because they fear those conversations may be emotional and may not lead to a specific implementable output,” Dreizler said. “Financial planners however, are used to having personal conversations with clients. In-depth conversations around values and goals are integral to comprehensive financial planning, and those advisors already have in their skillset the ability to have deep, meaningful and personal conversations with clients.”
These personal conversations will foster trusting relationships, allowing for forward-thinking strategies like ESG and SRI options to be integrated into portfolios and practices, Dreizler said.
“Financial planner advisors will find themselves well positioned to meet the growing demand for impact investing,” she explained.
Dreizler made two other industry predictions that will shape the ESG landscape in 2019.
- Larger Financial Services Firms Will Play A Bigger Role – In the past, large institutions such as RIAs and Fintech providers have funded the research to study the growing demand for sustainable investing and impact investing. With all of this accumulated knowledge, Dreizler said she expects these institutions will create tools, training and technology to capitalize on the growing demand from investors.
- More Choices, More Competition – “I predict that soon, every major fund family will have at least one offering labeled as ESG, Sustainable, Responsible, Green or some other variation,” Dreizler said.
The quality of these products will vary, but competition and choice for investors is expected to get better.
“Some large companies will acquire smaller managers with deep SRI and ESG experience. Others will just put a ‘sustainable’ name on a fund that happens to exclude tobacco and weapons,” Dreizler said. “Each investment management company interprets and markets the terms ESG, sustainable, and green differently.”
AdvisorNews Managing Editor Cassie Miller may be reached at cassie.miller@Adnewsfeedback.com. Cassie has an extensive background in magazine writing, editing and design. Follow her on Twitter @ANCassieM.