The Wall Street Journal - 16.03.2020

THE WALL STREETJOURNAL. Monday, March 16, 2020|R 5

issues.

Performance is another issue

for Mr. Windle and his clients.

Since the vast majority of sus-

tainable funds have launched in

just the past five years, there

isn’t enough of a performance re-

cord for him to be sure the funds

will serve clients planning for re-

tirement.

He also isn’t convincedthat

sustainable funds actually have

the social impact investors are

seeking.

Bank of America, which

started providing ESG training to

its advisers in 2015, last year be-

gan offering them training for

the CSRIC certification for so-

cially responsible investing from

Kaplan. As of September, Bank of

America says, around 63% of the

company’s advisers were includ-

ing sustainableandimpact in-

vesting in their practice.

At Deutsche Bank,the com-

pany’s wealth-management arm

is expanding its lineup of recom-

mended funds to include more

sustainable investments and

training its advisers througha

basic online course and a certifi-

cation for more-advanced ESG

topics.

Among advisers and clients

alike,one hurdle has been the

widespread belief that ESG in-

vesting harms financial returns,

says Lavanya Chari, head of

global products and solutions at

Deutsche Bank Wealth Manage-

ment.

“We need to debunk that myth

internally,” she says. “To do that,

we are doing a fair bit of training.”

Last year, 30% of large-cap sus-

tainable funds in the U.S. identi-

fied by Morningstar outperformed

the S&P 500, compared with 22%

of large-cap funds overall.

Mr. Holgeris a reporter for The

Wall Street Journal and Dow

Jones Newswires in Barcelona.

Email himat

[email protected].

F

inancial advisersare doing more to educate them-

selves and their clients about sustainable investing,

but there’s a longwaytogo.•Jessica Ground,

global head of stewardship at investment firm

Schroders, who oversees the integration of envi-

ronmental, social andgovernance, or ESG, factors

into investments at the firm, says clients often

need more hand-holding from advisers to understand ESG

issues, andadvisers aren’talways well-equippedto provide

thatguidance.•AsurveyreleasedlastyearbySchroders

found that 61% of U.S. investors said they would be encour-

aged to make sustainable investments if their adviser gave

them more information. That lackof informationisone rea-

son sustainable investing is stilla novelty among investors

in mutual funds and exchange-traded funds in the U.S.

BYDIETERHOLGER

Younger investors are drawn to sustainable

funds, but financial advisers are skeptical

Advisers Turn

To ESG, Warily

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Bruce Sabin and his son, Bradley.

JOURNAL REPORT |MILLENNIALS&MONEY

NY

U.S. assetsunder man-

agement using sustainable

strategies reached$12 tril-

lion at the end of 2018,

roughly a quarter of all pro-

fessionally managed assets

in the country, according to

the Global Sustainable In-

vestment Alliance. Still,

that’s mostly institutional

money. Among mutual funds

and ETFs,where individual

investorsput much of their

money, sustainable funds

held$137.3 billion in the U.S.

at the end of last year—less

than 1% of the country’s to-

tal$20.7 trillion of fund as-

sets, according to research

firm Morningstar Inc.

Many wealth-manage-

ment firms are taking steps

to make their advisers and

their clients more familiar

with and comfortable with

sustainable investing, de-

spite continued skepticism

among both groups.

Bruce,Andrew and

Bradley Sabin have re-

freshed their multigener-

ationalpractice around

the social valuesof

theirclients.TheSa-

bin WealthManage-

ment GroupofWells

Fargo Advisors is a St.

Louis-basedpractice with

close to300 clients and

$250 million under man-

agement.

Bradley Sabin, 31, is the

youngest ofthe three and

oneofthefirstfinancial ad-

visers in theU.S.toreceive

a CSRIC credential—for char-

teredsocially responsiblein-

vesting counselors—which

wasdevelopedbyKaplan

Inc.’s Collegefor Financial

Planning andUS SIF, theFo-

rumfor Sustainable and Re-

sponsible Investment, and

introducedinlate 2018.

In thepastfew months,

theSabinshavestartedask-

ing their clients about their

values and offering relevant

newinvestmentsorare-

alignment of existing port-

folios. The response has

been overwhelmingly posi-

tive, Bradley says. “We’ve

just seen their eyes light

up when they know that

we are going to be thinking

of a deeper dive,” he says.

The Sabins say their mil-

lennial clients are their

most enthusiastic,asa

group, for the firm’s new

approach. But they say that

their core group of clients

in their 60s and 70s also

have been eager to hear

about it. “A lot of our older

clients were very, very in-

terested in this,” says Bruce

Sabin,who is 70.

Mike Windle, 39 ,owner

of Custom Wealth Solu-

tions inPlymouth, Mich.,

believes that many more

wealth managers will fa-

miliarizethemselveswith

sustainable investing in the

nextfewyears.InFebru-

ary, he started offering a

portfolio of socially

responsible and en-

vironmentally

friendly exchange-

tradedfunds, mostly eq-

uity andbondproducts

from Vanguard Group

andBlackRock’s

iShareslineup.

Mr. Windle, who

has about 400 clients and

$85 million under manage-

ment, gave hisfirst presen-

tationtoclientson sustain-

able investing in February,

after it began to come up

moreinconversations. He

says most clients expressed

more concern abouthigh

feesanddiminished finan-

cial returns than the“moral

standings” oftheir holdings.

Mr. Windlealsohas

some concerns about ESG

funds, starting with their

fees, which often are

higher than those ofother

funds becauseofthe addi-

tionalresearchneededto

craftportfolios around ESG

W

HITNEY CURTIS FOR THE WALL STREET JOURNAL

I currently don’t

invest because I don’t

have enough money

available tomakea

meaningful investment.I

plan to invest—most likely in

property.”

—RandallBrechbiel, 25 ,

project manager at a public-affairs firm