Over a year ago, Fidelity's Clearing and Custody Solutions division introduced a "New Advice Value Stack," a striated pyramid of services that advisors should provide clients to align with clients' needs and desires and support their own value proposition.
The services include, from the bottom up, managing money, achieving goals, attaining peace of mind and finally fulfillment.
At the company's Inside Track conference in New York City this year, Fidelity included a panel of advisory firm leaders who focus much more on the upper rungs of that value pyramid, staking their futures on services apart from traditional investment management.
Jeffrey Gitterman, co-founder of Gitterman Wealth Management, said his firm outsourced traditional investment management activities years ago and now focuses in-house on environmental, social and governance investing, including fossil-free investment strategies, that the firm also offers outside advisory firms for a fee of 10 basis points.
ESG, which he calls the GPS of investing, is now part of the due diligence process, used by investment banks and a growing number of funds, and it attracts "stickier clients" for advisors, said Gitterman. Those clients value advisors who invest "in line with their values."
An ESG approach to investing is also a magnet that attracts next-gen advisors, said Gitterman, adding that his firm, which hosted its third Sustainable Investing Conference — most recently at the UN — has been "inundated with resumes," many from millennials. Sustainability is "sellable and scalable," said Gitterman.
