Company’s Wealth Management Leaders to Discuss
Client Demand and Industry Trends at The Economist’s Impact
Investing Conference This Week
Bank of America today announced that it is enhancing how it
engages with clients interested in pursuing positive environmental
and social outcomes through impact investing. For several years,
client-facing professionals from the company’s Merrill Lynch Wealth
Management, U.S. Trust and Merrill Edge businesses have been
winning and deepening relationships through goals-based
conversations. During these meaningful discussions, clients are
increasingly articulating impact-oriented goals alongside their
overall financial priorities.
“We’re focused on innovation as we develop our environmental,
social and governance (ESG) capabilities, and going right where our
clients are taking us,” said Andy Sieg, head of Merrill Lynch
Wealth Management. “Not so long ago, impact investments were a
small part of most goals-based discussions with clients. Today,
however, there are more ways for clients to align their values with
their investments, and they are proactively seeking information and
opportunities during conversations with advisors.”
A recent U.S. Trust study found that 38 percent of wealthy
individuals have or are interested in impact investments today.1
Other industry research has found that nearly half of affluent
investors are interested in participating in socially responsible
investments over the next 12 months.2 Additionally, 74 percent of
investors say they would be more likely to work with an advisor who
could offer investment strategies that result in both competitive
returns and a positive impact on society.2
Today, 17 percent of Merrill Lynch advisors use five or more
impact investing solutions to help meet their clients’ needs –
twice as many advisors compared to just three years ago. To address
these trends and growing demand, the company is enhancing its
process, platform and resources dedicated to impact investing. New
and expanded capabilities will further incorporate clients’ impact
investing preferences into wealth planning tools and portfolio
construction, including:
- Deeper client discovery
conversations – Merrill Lynch financial advisors often begin
goals-based conversations with clients through the firm’s
Investment Personality Assessment (IPA), a behavioral
finance-informed questionnaire used to identify individuals’
thoughts and feelings about investing. Since the IPA’s introduction
in 2012, more than 150,000 clients and prospects have participated
in these assessments, which include questions about interest in
aligning investments with the causes, issues and values important
to them while achieving their financial goals. During the first
half of the year, Merrill Lynch will introduce additional ways to
help clients articulate their impact investing preferences and
further inform goals-based discussions with their advisors.
- Integration with wealth planning
tools – Merrill Lynch will also enhance one of its primary
wealth planning tools – Wealth Outlook – to further support
goals-based conversations with clients on the topic of impact
investing. Advisors use Wealth Outlook to help clients gain a
greater understanding of their current financial situation and how
well positioned they are to meet their goals – in part through a
goal-funding status analysis – and to continuously track progress
toward reaching them. In the coming year, advisors who discuss and
input clients’ impact investing preferences into Wealth Outlook can
present clients a range of appropriate solutions that reflect those
preferences – among them, the firm’s proprietary Sustainable Impact
Multi Asset Class Portfolios and more than 20 individual impact
strategies available via its investment advisory program.
“As impact investment allocations within portfolios increase, a
stronger connection between financial and impact goals will be key
to meeting client needs and winning in the marketplace,” said Keith
Banks, head of the Global Wealth and Investment Management Chief
Investment Office (CIO) and Investment Solutions Group, and
president of U.S. Trust.
The CIO organization has recently introduced implementation
guidance for a range of impact investment solutions, including
those focused on gender equality, health care, education and
environmental sustainability. This month, a new impact investing
guide was also introduced to help U.S. Trust and Merrill Lynch
advisors gain a deeper understanding of the interest and
opportunities in this area, including how to identify and address
the needs of a growing number of clients. In addition, the CIO
organization will publish new whitepapers during the first half of
the year focused on the risk and performance realities of impact
investing, along with gender lens investing. Early discussions have
also begun with industry experts in the field of impact data and
metrics about the possibility of building a measurement and
reporting framework that would show clients their current exposure
to and progress towards impact goals.
“In addition to becoming more mainstream, impact investing has
undergone an evolution, empowering investors to look well beyond
just negative screens to pursue positive change and competitive
returns through a variety of investment vehicles,” said Jackie
VanderBrug, managing director and investment strategist for U.S.
Trust. “Consumers and investors have also become more aware of the
impact of the products they purchase and the companies they invest
in. A good example of this is the field of gender lens investing,
which has emerged from the growing economic role of women around
the world.”
Sieg and VanderBrug will discuss these and other impact
investing trends among Merrill Lynch and U.S. Trust clients and
throughout the industry as part of a powerful lineup of speakers at
the 2017 Impact Investing Conference, hosted by editors from The
Economist, on Wednesday, February 15 in New York. The inaugural
event will bring together more than 200 leading impact investors,
policymakers, academics and philanthropists to discuss obstacles to
mainstreaming impact investing, overcoming measurement challenges,
gender lens investing, and the relationship between the public and
private sectors. Bank of America is the founding sponsor of the
event.
Bank of America officially launched an impact investing program
in 2013 to meet rapidly growing client demand for investments that
have a positive impact on society or the environment without
sacrificing performance. As of December 31, 2016, clients of Bank
of America’s investment businesses had more than $11.3 billion in
assets with a clearly defined ESG approach.
Bank of America itself is committed to ESG leadership in its own
business as a key to delivering shareholder value. The company’s
approach in these areas reflects how it builds and maintains trust
and credibility as a company that people want to work for, invest
in and do business with. Highlights of these efforts include the
company’s employment practices, responsible product and service
offerings, and investments in creating a sustainable global
economy.
1 2016 U.S. Trust Insights on Wealth and Worth® Survey2 TIAA
Second Annual Practice Management Study, 2016
Bank of AmericaBank of America is one of the world's leading
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Bank of America is a global leader in wealth management, corporate
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