The old adage goes that if you wish to maintain peace, you should not discuss religion or politics. Advisors who adhere to that line on religion, however, may do so at the expense of their relationships, according to Crossmark Global Investments in Houston.
According to a recent survey by Crossmark, a global investment firm focusing on faith-based and values investing, investors under 50 with religious affiliations invest with their religious values in mind. In spite of this, 73% of the advisors for these clients have failed to inquire about their religious values or whether their values should be taken into account when making investment decisions.
In general, older investors were less likely to have discussed religious values with their advisors. It is estimated that ninety percent of investors over the age of 50 have not been asked about their values, as opposed to roughly forty percent of investors between the ages of 23 and 34.
Religiously affiliated millennials are particularly concerned about adhering to their values, according to the survey. It is extremely or very important to 63 percent of millennials, those born between the early 1980s and the early 2000s, that their financial advisor shares their values.
In this survey, 1,008 adults who claimed to be affiliated with a religion and had $250,000 in investable assets were included.
According to Crossmark, a recent Pew study indicates that approximately 72% of Americans are affiliated with a religious group.
In the past decade or more, people have become aware that they can combine their religious values with their investing,” said Victoria Fernandez, chief market strategist at Crossmark. We were surprised to discover that millennials are more likely to invest according to religious values than older generations.
Trust is at the core of this issue, she explained. “Many people prefer their doctors and their children’s teachers to share their values, as well as their financial advisors. In the absence of these values, the relationship will not be long-lasting.”
As an investment strategist with Ronald Blue Trust in Alpharetta, Ga., which specializes in investing by biblical principles, Nathan Manahan said he is not surprised Christians wish to live their lives faithfully and express their values. Advisors, however, are reluctant to discuss religion with clients for fear of offending them.
Considering faith-based principles complicates the situation by definition. It is possible to make a case for almost any company or investment based on religious principles, governance principles, or environmental principles. It is then the advisor’s responsibility to dig deeper into the client’s needs,” Manahan concluded.
Alcohol, tobacco, and gambling interests are usually excluded from investments when investing with religion in mind. Among the investments people want to avoid, adult entertainment topped the list.
Fernandez said the topic of religious values is often avoided in business settings, but she felt investors wouldn’t be offended if an advisor asked about their investment values.
According to younger investors, aligning their portfolio with their values will make achieving their investment goals easier.
Michael Kern, president and CEO of Crossmark, said investors care deeply about aligning their investments with their values. It is important for advisors to recognize what their clients value in terms of religious values.”