Advisors Failing to Engage Clients on Faith-Based Investing
A recent survey by Praxis Investment Management has revealed a concerning disconnect between financial advisors and their clients on the topic of faith-based investing. While 75% of Americans say they wish to discuss this subject with their financial advisor, only 9% of advisors are willing to initiate that conversation. The reasons behind this disparity are multifaceted. According to Chad Horning, president of Praxis Funds, advisors are reluctant to engage clients on faith-based investing due to their own discomfort and lack of awareness about solutions available. This discomfort stems from the fear of not producing good results, as expressed by Horning. Other key findings from the survey include:
- 65% of advisors perceive a lack of client demand, interest and/or awareness of faith-based investing.
- Just 59% of advisors are aware of faith-based investments.
- Advisors report a lack of product availability, doubt that investment performance results can be competitive, and believe that screening processes can be counterproductive to strong returns.
Despite these biases and barriers, advisors and investors who are aware of faith-based investing share positive views on its benefits. Faith-based investing empowers investors to feel a sense of purpose and fulfillment. Many experts predict that faith-based investing will gain popularity over the next decade as investors seek to align their faith with their investments to create real impact. “We need to ask our clients about their thoughts on faith-based investing,” said Mark Regier, vice president of stewardship investing at Praxis. “Engaging clients about their values has the potential to build stronger connections, create a deeper understanding of the client, and demonstrate value by introducing them to an investing approach they may never have considered.”
The Benefits of Faith-Based Investing
Faith-based investing can bring numerous benefits to investors, including:
- A sense of purpose and fulfillment
- Alignment with one’s values and faith
- Access to lower-cost, liquid, and tax-efficient investment options
The launch of Praxis Impact Large Cap Growth ETF and Praxis Impact Large Cap Value ETF, both tracking established indexes, marks a significant milestone in this growing field. These active equity ETFs have expense ratios of 0.36%, making them attractive options for investors seeking to integrate faith-based investing into their portfolios.
A Growing Field: Faith-Based Investing
Faith-based investing has been around for over two decades, with Praxis offering investment products since 1994. However, the industry has seen significant growth in recent years, with the launch of new ETFs and mutual funds. “Faith-based investing empowers investors to make choices that align with their values and faith, while also seeking to promote positive social and environmental impacts,” said Regier.
A Call to Action
Financial advisors, take note! The findings of this survey suggest that it’s time to engage your clients about their thoughts on faith-based investing. By doing so, you can build stronger connections, create a deeper understanding of your clients, and demonstrate value by introducing them to an investing approach they may never have considered. As Regier emphasized, “Now is the time to ask your clients about their thoughts on faith-based investing. Engaging clients about their values has the potential to revolutionize the way you practice your craft.”
About Praxis Investment Management
Praxis Investment Management is a company based in Goshen, Ind., and is part of the Everence company. With a faith-based approach to investing, Praxis offers a range of investment products, including ETFs, mutual funds, multi-fund portfolio solutions, and money market accounts.
Conclusion
The survey findings highlight a significant gap between financial advisors and their clients on the topic of faith-based investing. However, by engaging clients about their values and introducing them to faith-based investing options, advisors can build stronger connections and create a deeper understanding of their clients. As faith-based investing continues to grow in popularity, it’s essential for advisors to stay informed and adapt their approach to meet the changing needs of their clients.
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