As social consciousness in America continues to rise, the gap between "doing good" and "doing well" is narrowing. This trend is affecting every sector of our economy, including the financial sector, which has traditionally focused only on the bottom line. That's changing.
If you're evaluating the best way to approach your commitment to the community as you work with your financial advisor, here are three pointers to bring you up to speed.
"Good" is more than "not bad"
"Impact” and “investing”--used in the same sentence--are becoming popular buzzwords among wealth managers and financial advisors. But what does the term actually mean, and what should the average person know about personal investments and “doing well by doing good”? For more than a decade, the financial services industry has marketed what are known as “socially responsible investing strategies.” Until now, though, the approach has been mostly focused on excluding stocks and other investments that are seen as “bad,” like cigarette companies or manufacturers of alcoholic beverages. Now, savvy financial advisors and wealth managers are building portfolios that recognize and celebrate worthy investment candidates based on the good the companies do--not just for their shareholders, but also for their employees, communities, stakeholders and the world.
Tools for philanthropy are in high demand
Leading edge financial advisors and wealth managers offer their clients a broad array of tools to support their clients' charitable giving needs. Tools include not only impact investing options, but also charitable legacy planning, income tax strategies to maximize charitable gifts, and Donor-Advised Funds, which are quickly becoming the charitable planning vehicle of choice.
A little more human, a lot more success
Finally, today's wealth managers and financial advisors are adopting a more human approach to client service. This means advisors are more in tune with their clients' focus on philanthropy as an integral part of a well-rounded life. This is especially important for engaging the next generation of financial services clients, who are seeking more rewarding experiences at work and in their personal lives as they pursue both financial and community success.