4 Tips for Talking About Impact Reporting in Client Meetings

You're a financial advisor.

You saw that clients were interested in investing with their values, and you serve them well by diving into ESG in your practice.

You went through the hard work of figuring out what your clients care about. You did the research to build a portfolio that creates ESG impact.

You did it! Right?

Almost. Now it's time to put it all together. You have a great story to tell your clients - you've helped them invest in line with their values. Here are four best practices for sharing that story and reporting on your portfolio's impact.

1) Show the data

We've heard so many stories from advisors that introduce their clients to actual numbers, instead of ESG scores. The overwhelming reaction is "Wow! I had no idea this data even existed". Clients feel more secure knowing that you, their financial advisor, is considering all this complicated stuff, and making sure they aren't doing anything that violates their beliefs.

2) Pull out 3-8 impact highlights that you're most comfortable with.

There are hundreds of ESG data points. Even within a specific topic like gender diversity, you can find data on women on boards, women in management positions, diversity commitments, incidents of gender discrimination, sexual harassment policies, pay equity, and that's just scratching the surface. One of the biggest dangers with ESG data is overwhelming a client with too much information, especially information on issues that they don't care so much about.

You might want to pick 3-8 impact metrics that are relevant to that client, and that you can tell stories about. Maybe you can pick a metric on air pollution in minority communities, and use that as an opportunity to talk about environmental justice, and how corporate toxic air pollution is disproportionately borne by minority and poor communities.

3) Know your client

When you decide what stories to tell and what data to share, make sure you know what kind of client you're presenting to. That's one of your biggest tasks as an advisor, understanding your clients and presenting information in a way that most resonates with them.

a) Some clients just want the highlights. Show them that their portfolio has more women on boards than the benchmark, point out a top company or two, and call it a day.

b) Other clients want to know all the ways they're beating the benchmark on impact. It might be best to show a broad set of positive impact metrics.

c) The last set of clients won't be satisfied unless they see the trade-offs. If you only present them good information, they will be skeptical that it's real. With these clients, it's best to show some areas where your portfolio is performing worse along with ways that your portfolio is creating positive impact.

4) Don't ignore financial performance, but you don't have to lead with it.

Your main job is to help clients plan for retirement, financial performance is crucial. But starting the conversation on the values side helps you differentiate your practice and show how you're tailoring your advice to your clients. Additionally, while financial performance can go up and down, it's always helpful to demonstrate to your client that you're able to help them consistently create impact, no matter what.

When you talk about financial performance, you might point to the myriad studies demonstrating that ESG is unlikely to hurt financial performance, and may very well help it. You might explain that as consumers and employees are more conscious about their choices, the companies that lead the way from an ESG perspective are poised to meet that demand.

The first few conversations with clients will be tricky, but you'll get the hang of which stories resonate, and which clients are the most interested. And we're here to help. YourStake provides transparent and personalized ESG data to help make your conversations with clients the best they can be.

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