Investors want ‘more personalization’ when it comes to ESG

Is the controversy and skepticism around environmental, social and governance investing finally easing? Holly Mazzocca of Cincinnati-based Bartlett Wealth Management, one of the oldest RIAs in the country, believes it is.

Despite the controversies that have dogged ESG investing strategies, she says has seen “a tremendous shift” towards personalization.

“The idea of greenwashing and some of the worries about just slapping ESG labels on to a fund that isn't necessarily an ESG fund scared many investors,” she says. “They don't want to have a label on it, they really want to understand it, which can be hard to do with the size of public companies and the size of public investments.

“By having a more personalized approach and individualized conversations with our advisors, many of our clients are starting to dig deeper and understand, ‘What am I trying to accomplish and how can my advisor help me accomplish that?’”

Mazzocca, who is Bartlett’s president, principal and also serves as a wealth advisor, highlighted how the firm has invested in the ESG space since the 1970s, when the focus was on value-based investing. Bartlett’s clients were from religious or non-profit organizations, who wanted to ensure they weren't investing in ways that were conflicting with their personal or organizational mission and values.

Those organizations have generally stayed with Bartlett and 15 percent of its client base are those in social services agencies and educational organizations. Mazzocca says that while her clients want to have conversations around ESG investing, they often don’t fully understand what kind of fund they want to invest in., focusing instead on how their portfolio compares to the broader market.

“If there's one thing that our industry has learned, it's that not all ESG means the same thing to every client,” she says. “We often tell our clients that it's not about investing with Bartlett's values, it's about investing with your values.

This sometimes involves working around legacy positions with their clients, Mazzocca added. “Maybe it’s family stock, or a closely held business or public company shares - then building portfolios that are very customized to the needs of that individual.”

Mazzocca’s role at Bartlett focuses on making sure its female clients have a place where they can connect. She highlights Bartlett’s WEinvest, a platform that helps women build connections and community across Bartlett’s client base and expertise.

Monday, April 22 was Earth Day and Mazzocca says for ESG investors, it's always going to be a topic they care deeply about.

“I would encourage advisors to continue to lean into the conversations. Let's not take the easy way out,” she says. “Let's really dig in and understand what our clients are working to achieve and accomplish and be a part of that solution versus taking a one-size-fits-all approach.”

As for what’s next in the RIA space, she foresees a big focus on beneficiary development and a transition of wealth, something “that can never be overlooked.”

“The RIA industry needs to continue to invest in up-and-coming talent, to be able to serve clients the way that clients expect to be served,” Mazzocca notes.

For Bartlett, that means RIAs investing heavily in technology, and building an experience that's going to be loved by older and younger clients alike.

“It also means creating an experience that includes things like the way you communicate, what the team structure looks like, how you meld together planning and investment. It's an overall picture of the experience that goes well beyond just the technology interface.”

Name: Holly Mazzocca
Position: President, principal and wealth advisor
Company: Bartlett Wealth Management
Founded: 1898
AUM: $8.4 billion