We recently released an insight paper on Sustainable Investing, called Purposefully Personal: Crafting a High-Growth ESG Experience.  We’re posting the executive summary here – if you find it intriguing, hop over to download it, and feel free to share broadly.

To put this together our team reviewed over a hundred ESG whitepapers, surveys, webinars and thought pieces.  We then synthesized dozens of conversations with sustainable investing leaders, advice leaders and practitioners at wealth management firms, robo-advisors and ESG specialist firms around the globe.  We combined this with our own unique datasets on investor ESG preferences and the foundational academic work on social and distributive preferences completed in the last three decades.

With this insight paper, we’re hoping to spark a conversation about what it means to provide a differentiated and personalized sustainable investing experience.  We believe there’s a more fruitful – dare we say, “sustainable” – path for wealth managers to follow.

PART I: The Unintended Consequences of the ESG Boom

  • An innovation boom in ESG products, while good for consumer choice, is leaving advisors and clients behind – at best confused and overwhelmed, at worst hesitant, cautious and mistrustful.
  • The stakes are high. Generational change and differing attitudes to ESG will reorder the wealth management space in the coming decade. Getting the ESG experience right—right now—matters.

PART II: Clients and Advisors Left Behind

  • Methods for understanding clients’ sustainable investment preferences have hardly advanced. Most firms still simply ask clients what they care about.
  • These ad hoc profiling methods cannot match the granularity in client preferences to the expansive and growing ESG product set available.
  • Advisors will (unwittingly) continue to compete in a product-centric ESG arms race because they lack a client-centric basis for personalizing the sustainable investing experience.

PART III: A Sustainable Personalization Strategy

  • The advisors that will emerge on top through the ESG boom will build differentiated, personalized ESG experiences that draw clients to them and spark long-term, loyal relationships.
  • The foundation of their personalization strategies will be a deep understanding of the full contours of each client’s unique ESG preferences.
  • To gain this level of client understanding, industry leaders will rely on revealed preferences methods, which sit at the intersection of decision science, behavioral economics and human-centered design.

Download Purposefully Personal, and feel free to share broadly in your firm. We welcome questions and feedback – please send to insights@capitalpreferences.com