The Aha Moment: Is your advisor not really hearing you? There is a tool for that

September 25, 2024 at 10:23 AM EDT

There is no shortage of people interested in sustainable investing – for example, studies show that around 90% of women and millennials want to align their investments with their values.

But there’s a problem I hear over and over from investors: their financial advisors don’t know how to respond when they say they want to invest sustainably. That lack of communication is a big impediment to a lot of people’s Aha Moments.

There’s debate in the sustainable community as to why it’s been so hard for traditional advisors to make this connection with their clients. But I think the answer’s pretty simple – it’s not clear how “values” fits into a practical financial plan.

That’s why think2perform’s new Values Exercise tool caught my attention. I came across it while working with a client that emphasizes behavioral finance approaches for their retirement plan participants. Curious, I checked in with think2perform’s CEO Doug Lennick to learn more.

A better way to talk values

The Values Cards Exercise is a very simple online tool that encourages you to consider which personal values matter most to you. The values cards include ESG concepts like environmental protection or social justice, but they go beyond that, incorporating traditional life values like family, independence, community and many others.

In the end, you are left with a small handful of values that is foundational to your identity. For Lennick, identifying these values is essential to making decisions that stick. As Lennick explains, “the values tool is a way to inform your decision making, so your choices are consistently aligned to who you are on your best day.”

The values tool came out of think2perform’s research into behavioral finance and its work with psychologist Rick Aberman to identify the key drivers around people’s money decisions. Using the tool is an effective way for advisors and clients to have better conversations around long-term financial planning.

Removing the obstacles

A key role that advisors play is providing constructive ways to help clients stick to plans that position them for their long-term goals. One consequence is that, when a client wants to make changes to their financial plan, the advisor’s instinctive reaction is often to discourage them.

So while you may be struggling to communicate the importance of sustainability in your investments, your advisor may be struggling to distinguish unhelpful changes in direction from meaningful, necessary changes. The Values Exercise can solve both problems.

For investors, using the tool can provide greater clarity – around what values matter to you, how those values are defined and what your core priorities really are. Sharing the results with your advisor – or even better, doing the exercise together – can improve communication while demonstrating your level of commitment to the values you hold most dear.

For the advisor, a client’s most important values are a touchstone they can return to repeatedly over time, to better understand which client requests to focus on. It also gives advisors a useful tool for talking clients “off the ledge” when they are concerned about their investments. Lennick notes think2perform offers certifications for advisors on the behavioral finance practices that inform the tool.

“The tool is primarily about helping advisors build a relationship with their clients the right way,” says Lennick. It opens the door to talk about values and, over time, helps the advisor talk regularly with clients not just about market ups and downs, but about the issues that truly make a client believe they are making the best decisions.

So if your advisor isn’t hearing you when you talk about sustainability or the values you want to see reflected in your investments, the Values Cards tool may be the step that leads to your Aha Moment.

Read more of The Aha Moment: Looking for climate mitigation investments? Follow the government money

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The Aha Moment: Is your advisor not really hearing you? There is a tool for that

A better way to talk values

Removing the obstacles

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