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Similar to Socially Responsible Investing (SRI): Wealth Managers Path to Millennials and Women
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Socially Responsible Investing (SRI): Wealth Managers Path to Millennials and Women
- 1. Socially Responsible Investing (SRI): Wealth Manager’s path to Millennials and Women Ramis Jamali, CFA September 2017
- 2. 2 Ramis Jamali At a glance By adopting a value based approach and including SRI options in client discussion, advisors can capture a significant portion of this underserved market. Both, Millennials & Women, are value driven and consider socially responsible investing an important part of their portfolio and expect their advisor to be knowledgeable about SRI. However, they are underserved and dissatisfied, resulting in significant attrition and loss of business for advisors. Millennials and Women comprise and significant segment for wealth managers and their prominence will continue to grow.
- 3. 3 Ramis Jamali 31% 32% 35% 0% 5% 10% 15% 20% 25% 30% 35% 40% Baby Boomers Gen X Millennials Millennials lead the way They not only compromise the largest segment of the workforce but also will inherit a significant sum Millennials’ participation will continue to grow. 1. Statistics Canada. Table 282-0002 - Labour force survey estimates (LFS) 2. Wall Street Has Its Eyes on Millennials' $30 Trillion Inheritance. Bloomberg, March 3, 2015 2016 Canadian Labour Force by Generation1 The largest wealth transfer in the next few decades2 will leave millennials with more assets. $30 Trillion
- 4. 4 Ramis Jamali Women are closing the gap Higher education has led to growth in labour force participation Women labour force participation grew from 24% in 1953 to 83% in 20144. Women university graduates outnumber men3 [6/10] [4/10] 3. Women and wealth: The investment sector’s new – and crucial –Frontier – Globe & Mail, August 2014 4. The surge of women in the workforce: Stats Canada http://www.statcan.gc.ca/pub/11-630-x/11-630-x2015009-eng.htm#def1 35% 40% 45% 50% 55% 60% 65% 1976 1981 1986 1991 1996 2001 2006 2011 2016 1976 - 2016 Canadian Labour Force By Gender Men Women The gap continues to narrow, albeit at a slower pace. 52% 48%
- 5. 5 Ramis Jamali Women in control Thanks to higher education and labour participation their financial control will continue to grow 3. Women and wealth: The investment sector’s new – and crucial –Frontier – Globe & Mail, August 2014 5. New Strategies for Nontraditional Client Segments. BCG, June 15, 2016 30% Current wealth controlled by women in Canada3 $3.2 Trillion annual growth in their wealth. 5 7%
- 6. 6 Ramis Jamali 5. New Strategies for Nontraditional Client Segments. BCG, June 15, 2016 6 Financial advisors are failing women. Strategicmarketin.ca Unhappy marriage Lack of empathy and attention is the leading cause for advisors being fired 75% 75% of millennials leave their advisors due to customer dissatisfaction. 5 Dissatisfied 50% Mystified 50% of advisors have no view on how to serve millennials.5 Unhappy 73% of women are dissatisfied with their advisor.6 Fired 80% of women leave their advisor.6 The Search 87% of women cannot find an advisor who meets their needs.6 50% of women believe men get more attention. Men are 2X more likely to be approached.6 Lack of Attention Millennials Women
- 7. 7 Ramis Jamali Value Driven Both groups are value driven and consider SRI an important aspect of their investments Digital access is a important consideration for millennials; they want easy and high quality access to information5. 70% of millennials want access to socially responsible investing5. 67% of millennials want their advisor to be knowledgeable about socially responsible investing7. Listening Customization Knowledge Women want their advisors to listen and understand their values and needs6. Women want solutions that fit their specific needs, goals and values5. 62% of women want their advisor to be knowledgeable about socially responsible investing7. Millennials Want Women Want 5. New Strategies for Nontraditional Client Segments. BCG, June 15, 2016 6. Financial advisors are failing women. Strategicmarketin.ca 7..Millennials, Women, and the Future of Responsible Investing. Responsible Investment Association, April 2016
- 8. 8 Ramis Jamali 7.Millennials, Women, and the Future of Responsible Investing. Responsible Investment Association, April 2016 8. 2017 RIA Investor Opinion. Responsible Investing Association, June 2017. Growing interest in SRI, but lack of awareness results in lack of action 77% of Canadians are interested in SRI.8 Of women are unsure about SRI investing, presenting an opportunity for advisors.7 35% Millennials expect to invest in SRI over the next 5 years7. 81% Of Canadians have very little or no knowledge of SRI options.8 73% Lack of awareness is a barrier
- 9. 9 Ramis Jamali 10. Investors and Responsible Investing: What advisors need to know. Ethical Funds May 2014 Advisors: the custodianInvestors look to their advisors to initiate the SRI discussion; however, advisors do not take the initiative and leave an immense opportunity on the table Value advisors can add, but… Only 14% of advisors have initiated a SRI discussion10 Investors would be more likely to choose SRI options if10 : 1 2 3 4 The Advisors suggested a suitable option They were more confident in their performance Their financial institution informed them about SRI Is SRI were easier to access
- 10. 10 Ramis Jamali SRI in your practice SRI can be your firm’s path to attract and retain millennials and women Adopt a value based approach Initiate SRI discussion with clients Include SRI options in your practice Listen and understand what’s important to them Returns are not the only factor Focus on the relationship and not the transaction Develop a SRI knowledge base Ensure access to SRI options are available Engage in SRI industry discussions Ensure there is a value alignment Shed light on SRI myths such as performance concerns Suitability is paramount