How Wealth Advisors Can Harness Sustainable Investment Stories for Positive Change and Business Growth
Tuesday, May 23, 2023
May 2023
How Wealth Advisors Can Harness Sustainable Investment Stories for Positive Change and Business Growth

Strong storytelling can enhance your reputation while educating and empowering clients

By Melissa Banigan

In the world of finance, a new narrative is swiftly taking shape — one that combines profitability with purpose and financial returns with positive impact. As the transition toward sustainable investing continues, wealth advisors find themselves at the forefront of this transformative movement, with a unique role in shaping the narrative and communicating the importance of sustainable investment stories to their clients.

By crafting compelling narratives that convey the larger impact of sustainable investments on ourselves, our communities, and the world, wealth advisors can provide their clients with more than just financial data — they can also engage their clients on an emotional and intellectual level, igniting a sense of purpose, aligning investments with values, and driving positive change. 

As a storyteller with over 15 years of experience helping purpose-driven companies and communities around the world tell stories that matter, I’d like to share my take on how wealth advisors can use the art of storytelling to move the needle with their clients, drawing inspiration from the rich tradition of oral storytelling to enhance the effectiveness of sustainable investment narratives.

Connection and Authenticity Through Consistent Core Messaging

One key element of oral storytelling is the presence of a single overarching message or takeaway. In the oral tradition, a story may change slightly over the years as it is passed from person to person, adapting to different cultural contexts and audiences while preserving its core message. This practice of distilling a story down to its essence is also crucial in corporate storytelling as it ensures that the message is clear and memorable.

Wealth advisors can benefit from this concept of stories spreading through communities and networks. Compelling corporate stories have the potential to resonate with a wide audience and become ingrained in our social vernacular.

Outside of the wealth advisory space, a notable example of a company that achieved this is Apple. Their iconic "1984" Super Bowl commercial, directed by Ridley Scott, is widely regarded as a groundbreaking advertisement that not only introduced the Macintosh computer but also conveyed a powerful message about individuality and defying conformity. The commercial showcased Apple's innovative spirit and positioned the company as a champion of independent thinking. Over time, its message became deeply embedded in popular culture, with references and parodies appearing even now, nearly 40 years later, in various forms of media. Many people today may recognize the message of the commercial without even realizing it originated from Apple. This demonstrates how a corporate story, when effectively crafted and widely shared, can transcend its original context and become part of a larger cultural narrative.

An overwhelming majority of today’s investors in the United States — a whopping 85 percent —  express an interest in investing more sustainably. No longer focused solely on financial returns, they want their investments to have a positive impact on the world. By telling compelling sustainable investment stories, wealth advisories can attract and retain more of the vast number of clients who prioritize sustainability and responsible investing. 

Telling sustainable investment stories brings to life the tangible outcomes of sustainable investments, showcasing the companies and projects creating positive change in areas such as renewable energy and social impact initiatives. For example, wealth advisors can share stories about companies that don’t meet diversity thresholds so investors may choose to divest from them, as well as provide examples of companies that perform well within a portfolio on diversity metrics. For instance, ETSY fosters diversity within the workplace by having women and non-binary people make up half of their executive team and their board, and nearly half of their overall workforce.

Enhancing Reputation and Credibility Through Communications

By illustrating the measurable impact of sustainable investments, wealth advisors can foster a sense of purpose and connection for their clients, strengthening their commitment to sustainable finance. But it can also profoundly impact their reputation and credibility by demonstrating their commitment to environmental and social responsibility, positioning them as trusted leaders in sustainable finance. By actively incorporating sustainability considerations into their investment strategies and then sharing stories about successful sustainable investments, wealth advisors can build trust with clients who seek both financial returns and positive impacts. These stories serve as evidence of their expertise and track record in identifying investment opportunities that generate financial and sustainable returns.

Consider a wealth advisor who shares the story of a socially responsible investment portfolio that has consistently matched, or even outperformed, more traditional portfolios over the years. By highlighting stories about financial success achieved through sustainable investing, the advisory not only attracts new clients but also reinforces the trust and loyalty of existing clients who value the alignment of their investments with their values. This is why great wealth advisory firms recognize the importance of a strong marketing and communications function in their business strategy. As company storytellers share sustainable investment messages with a wealth advisor’s network, word-of-mouth referrals and positive testimonials from satisfied clients who appreciate the advisory's commitment to sustainability further enhance the advisor’s reputation in the industry.

Educating and Empowering Clients

One of the key roles of wealth advisories is to educate and empower their clients. Sustainable investment stories provide a powerful tool for achieving this objective and help wealth advisors tell stories that connect to investors’ values. For example, suppose an investor is a doctor with ties to a developing country. They might appreciate stories that showcase the success story of a pharmaceutical company that distributes affordable and life-saving medicines in underserved regions. Or if a client contributes to a Black church in their community, they might want to hear more stories about investment funds supporting racial justice initiatives.

This approach educates clients about the power of sustainable finance but also empowers them to make informed investment decisions that align with their values. Through ongoing communication and education, wealth advisors can deepen clients' understanding of the broader impact of their investment choices and foster a sense of personal fulfillment derived from investing with purpose.

As more people become aware of the benefits of sustainable investing and the opportunities to make a positive difference, the demand for sustainable investment options grows. As forward-thinking wealth advisors share more thoughtful stories about sustainable investment through their networks, clients who might not have previously considered sustainable investing may be inspired by the potential to make a difference through their investment choices. This, in turn, could encourage more companies to adopt sustainable practices, creating a positive ripple effect in the investment landscape. 

Sources and footnotes

Ethic Inc. is a Registered Investment Adviser located in New York, NY. Registration of an investment adviser does not imply any level of skill or training. Information pertaining to Ethic Inc’s registration or to obtain a copy of Ethic Inc.’s current written disclosure statement discussing Ethic Inc.’s business operations, services and fees is available on the SEC’s Investment Adviser Public Information website –www.adviserinfo.sec.gov or from Ethic Inc. upon written request at support@ethicinvesting.com. Information provided herein is for informational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Any subsequent, direct communication by Ethic Inc. with a prospective client shall be conducted by a representative of Ethic Inc. that is either registered or qualifies for an exemption or exclusion from registration in the state where a prospective client resides. Information contained herein may be carefully compiled from third-party sources that Ethic Inc. believes to be reliable, but Ethic Inc. cannot guarantee the accuracy of any third-party information.

Ethic Inc. does not render any legal, accounting, or tax advice. Ethic Inc. recommends all investors seek out the services of competent professionals in any of the aforementioned areas. Ethic Inc. cannot provide any assurances that any investment strategies, simulations, etc. will perform as described in our materials. ALL INVESTMENTS INVOLVE RISK, ARE NOT GUARANTEED, AND MAY LOSE VALUE. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY. 

Contributors

Melissa Banigan is a content strategist with over 15 years of communications experience working with global companies and nonprofits. Also a journalist and author, her work appears in The Washington Post, CNN, the BBC, NPR, and the Independent, among other publications, and she's written three books for youth.

Travis Korte is the associate director of Sustainability Research & Data at Ethic. Previously, Travis organized civic-minded technologists at Hack for LA and advised a wide range of clients on data science, data policy, and quantitative methods. You can follow him on Twitter at @traviskorte.

Maddy Speal is originally from Toronto and has lived in New York City since 2019. She previously worked at Morgan Stanley on the Cross-Asset Sales team covering Pension, Endowment, and Foundation clients, and spent two years partnering with structuring and trading desks to market bespoke investment ideas, hedging opportunities, and MS’ proprietary Quantitative Investment Strategies (QIS). Graduated from Johns Hopkins University with a B.A. in Economics.