Financial Advisor Survey 2016
The Faith Driven Investor movement stands on the shoulders of those who have come before us. John Siverling and the Christian Investment Forum are just one of the groups who have led this conversation, and we're grateful to feature their contribution to the movement here.
Following the 2013 survey on this same topic, research from the new 2016 Survey done by the Christian Investment Forum showed strong progress on the awareness, knowledge and credibility of Faith based investing among financial advisors. The survey suggests the initiatives at CIF as well as other like minded organizations is changing perceptions in a positive way, and should be continued with the core Kingdom Advisors as well as with an expanded audience of advisors and investors.
One finding from the survey results was over 82% of respondents saying they were familiar with BRI, with 54% saying they were Very Familiar with BRI. Those Familiar with BRI were up 29% from the 64% of respondents who felt that way in 2013. In addition, there were no respondents who indicated they had never heard of BRI, and only 1% said they were not very familiar, in comparison to 13% who were in those categories in 2013. In essence, within the respondent pool there was universal awareness, and significantly greater familiarity with Faith-based investing.
Another finding was that advisors agree that Faith-based Investing can meet the fiduciary requirements of their clients, and is a credible and appropriate method to invest in a professional manner. 83% agreed with that statement, and only 4% disagreed. In addition, over 88% of the advisors who responded said they were interested in recommending investments that align with client values.
The survey also illustrated opportunities for continued growth in BRI assets. The market share of BRI assets remains significantly below what would be expected based on both investor and advisor interest. Responses from the survey suggest that knowledge of BRI, the investment choices, and the performance of BRI funds and portfolios needs to be improved in order to increase the usage of Biblically Responsible Investing.
From that survey data, following are the key takeaways:
Key Takeaway #1 – Awareness is Nearly Universal
The AWARENESS of BRI and what makes up BRI has grown to nearly universal familiarity within the respondent pool, but there remains a gap between that awareness and a more detailed functional knowledge of product and service offerings currently available.
Key Takeaway #2 – Knowledge and Credibility are Improving
The level of satisfactory KNOWLEDGE in BRI is catching up to the awareness level, as is the belief in the credibility and professionalism of BRI.
Key Takeaway #3 – Stay the Course on Message
There has been a sizable improvement in each of the key areas for adoption of BRI. The key learnings from this success can be used to expand awareness and education programs to a larger segments of the advisory profession as well as with investors.
The opportunity to fill the gap of awareness and knowledge can result in meeting a significant unmet need in the marketplace for funds and investing strategies that align with investor’s faith and values, similarly to how the socially responsible investing movement has grown.
According to the Forum for Sustainable and Responsible Investment (USSIF), $8.72 Trillion of US domiciled assets were invested using Sustainable, Responsible, & Impact (SRI) investment practices or integrate ESG factors into the investment process. Those assets were owned or managed by 477 institutional investors, 300 money managers, and 1,043 community investment institutions. This represents a 33% increase in assets compared to 2014, and a 263% increase from 2012 when $3.31 Trillion was under management. According to USSIF, this now represents 1 out of every 5 dollars invested which incorporate some form of SRI.
The number of SRI funds grew to 1,002 with total assets of $2.6 Trillion, compared to 720 funds with just over $1.0 Trillion in assets under management in 2012. Based on a total market of $18.1 Trillion, SRI funds account for roughly 14% of total assets under management, double the market share from 2012.
Specific to Faith-based Investing, research by the Christian Investment Forum suggests there remains a large market opportunity within the individual or household investor base. Based on the individual investor market size, and Christian investors who express interest in aligning investing with their faith, this market is approximately $1.3 trillion. That total is a small percentage of the estimated $11.9 trillion in total mutual fund assets held by Christians, but is estimated as those Christians who are more passionate about alignment and thus are the most likely to lead a shift towards BRI. This estimate is very close to a similar study done by McKinsey for a large financial institution. That study estimated the addressable market at $2.3 trillion. The opportunity is still much larger than that, as research as indicated as many as 80% of U.S. Christians would be interested in aligning their investing with their values. With 73% of the U.S. population identifying as Christian, a rough estimate suggests over 58% of the total market could be interested in Faith based investing products and services. That would equal $10.6 trillion of assets.