Context: The idea of Calling Money “Promises” may be interesting, but our society often treats money as an instrument that confers power over other people. Financial investments, which lots of people use as an instrument to try to get enough money to live and retire with, are also a form of power over other people. They may be even more so a representation of power than cash, given that they are often a formalization of the ability to exercise power over those acting on behalf of corporations (this is part of the definition of a shareholder). The fact that people have an ethical choice to make in regards to their investments is not part of mainstream conversation. People sleep easy at night ethically with their investments because they have not been shown that there are ethical choices to be made. Financial advisors (the person who asks you your savings goals and then sets you up with various investments to reach those goals) are not trained to bring up ethics with clients and are not pushed to do so. That may in part explain why, though good sounding in principle, socially responsible investment (SRI) portfolios make up quite a small proportion of the Canadians investments. There is also no legal incentive to follow SRI thinking in crafting a portfolio. In thinking about how this may change and how to apply pressure, it is useful to look at the times that Canadians set up long-term investment portfolios. These instances are when they get their first paying job in high-school, when they get a summer job during university, when they graduate from university and find secure employment, and when they are unhappy with a currently investment or want to invest in a new one.
Idea: Through appropriate marketing, target the moment of university / college graduation as a time for considerable discussion around the impact of invested money and also the options around socially responsible investments (SRIs). The slogan could be something like: Ask your financial advisor “what is my money doing?”. There could be accompanying ads for specialists who can help you navigate the investments world through the perspective of social responsibility. There are two effects that people around graduation age can have. First, there is the effect of more investment in SRIs in Canada which in theory means more money going to support good activities and less money going to destructive activities that may be of questionable ethics. Second, and maybe more powerful in the short-term, is the effect that a whole group of young people would have if they asked their financial advisors some simple questions. SRIs could quickly become a much more mainstream concept and common conversation point for financial advisors (the people who basically tell people how they should invest for the next few decades because it’s too complicated for most people to do or even understand on their own). Having asked my financial advisor at a major Canadian bank about their SRI options and debating the ethical grounding of them, that advisor ended up learning a lot and spoke to the manager of the branch to pass on that a young person was asking about these concepts and associated financial instruments.
- Fear: People are scared of taking risks with their money. The perception that this is an especially large risk will need to be overcome.
- Ignorance: A lot of people will have little clue what SRIs are, let alone the basics of long-term savings.
- Access / distribution: Lots of marketers try to get to people as the graduate, and universities try to keep marketers off campus right around graduation. Getting this message out and to the right people is challenging but not impossible.
- Which instruments to pick: If some financial products are to be highlighted and promoted for young adults, which ones should be picked out of the available options? Maybe promoting specialists instead of specific products is better.
People already doing this:
- This is partially the mandate of the Social Investment Organization.
- Some banks, like Desjardins, are trying to have their advisors provide this kind of expertise.