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ESG explored: How to talk about sustainability with clients

Published: 30/09/2021

Financial adviser at Resolve Financial Solutions, Jack Dudley, shares how he has fully embraced sustainable investing by integrating Environmental, Social and Governance (ESG) funds into his advice process.

As part of our ESG Explored video series, we investigate how sustainable investing can be best explained to clients and introduced to conversations in the most effective way.

To find out, we caught up with financial adviser, Jack Dudley, to hear first-hand about the importance of keeping it simple when discussing this subject, especially around the language used.

We also learn that clients – rather than expecting their adviser to have all the answers – mainly just want to know that their money is not doing harm to the world, while achieving their financial goals at a reasonable price.

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How do you go about starting ESG conversations with clients?

“We find it tends to differ depending on whether we are talking to new or existing clients. If it’s a client that we haven’t spoken to for a while and we’re doing an annual review, we might jump into the topic of sustainability as part of that. With newer clients, it’s a little bit different because it can take a little bit of time to get into that conversation. Once we’re thinking more in-depth about us working together, it is really front-and-centre in our proposition. It is almost the very first thing we talk about when we are explaining about who we are at Resolve Financial Solutions and how we operate over the long-term. The response we are getting has been really positive. It’s almost like a light-bulb moment for clients. From that point the conversation flows smoothly. We can then explain what ethical investing - and positive, sustainable impact – might mean for clients from there, and answer any questions they might have.”

Once you’ve established a client is looking to invest sustainably, how do you help clients choose a solution which is right for them?

“On the whole, we’re finding it’s a relatively straightforward thought-process for clients. Generally, they just want to make sure that what they are doing is good for the world. There will be a few clients that are passionate about certain areas, so it’s on us to make sure we source that information for them. But when it comes to the specific make-up of portfolios or funds, financial advisers don’t need to know absolutely everything to do with this style of investing. Not as much as people might think. By having those initial conversations about what ESG is and how it might apply to them, we tend to let the client lead from there. Through a couple of open or closed questions, we can bring out whether there is a particular area they are quite passionate about. For the vast majority there isn’t. It tends to be the feeling that the money they are investing is doing good for the world, meeting certain EU sustainability goals and so on. I think as long as financial advisers are promoting this topic at the forefront, it will naturally just flow from there.”

There are so many industry terms used around ESG investing, how do you talk to clients about it in a way that resonates?

“As advisers, we need to be quite careful to ensure that the language we are using is as suitable to the client as possible. We try to put it into words that reflect what they are hearing in the media, and describe it in a way they will understand. We don’t tend to use the acronym ‘ESG’, because a client might wonder what that actually means. Obviously as advisers we understand it, but with clients we tend to use terminology that is likely to be more relatable – words such as ‘sustainable’, ‘future’, ‘positive impact’ and ‘ethical’. We find clients identify with these more easily. Like with all financial planning, we are putting things in plain English, without diluting it too much. Avoiding ‘adviser speak’ and using more client-friendly language to make sure it as clear as possible.”

To find out more from Jack about how he has embraced ESG investing and integrated sustainability into his advice process watch the video below.

The full ESG Explored series is also available to watch on the Vitality Adviser YouTube channel. View Playlist here.

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