Considering faith in investment portfolios is a conversation that 75% of Americans say they would like to have with their financial advisor but only 9% of advisors are willing to initiate that conversation, research out this week from Praxis Investment Management finds.
“This disconnect suggests that advisors run the risk of underestimating or ignoring what’s important to clients,” said Chad Horning, president of Praxis Funds, in a press release announcing the survey results.
“But the research also explains why: Advisors are uncomfortable with the topic, have relatively low levels of awareness of solutions available, and lack confidence in the efficacy of those solutions. In short, they’re reluctant to engage clients on a topic they fear will not produce good results.”
Other highlights from the research:
- 65% of advisors perceive a lack of client demand, interest and/or awareness.
- 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 the biases and barriers identified, advisors and investors who are aware of faith-based investing share positive views on its benefits. There’s consensus in the data that faith-based investing empowers investors to feel a sense of purpose and fulfillment.
- Many expect faith-based investing to gain popularity over the next decade.
“Clients want to align their faith with their investments in order to create real impact,” said Mark Regier, vice president of stewardship investing at Praxis. “The broader availability of lower cost, liquid, tax-efficient faith-based ETFs can help raise awareness and prompt advisors to explore their options for serving these values-driven investors.”
Praxis published the research in conjunction with its launch of the Praxis Impact Large Cap Growth ETF and Praxis Impact Large Cap Value ETF. The two active equity ETFs track the CRSP US Large Cap Growth and CRSP US Large Cap Value indexes, respectively. The expense ratios for both ETFs are 0.36%.
“Now is the time to ask your clients about their thoughts on faith-based investing,” Regier encourages financial advisors. “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.”
Since 1994, Praxis has offered investment products designed to meet practical needs for everyday investors seeking to steward their assets consistent with their desire to promote positive social and environmental impacts. Praxis brings a faith-based approach to ETFs, mutual funds, multi-fund portfolio solutions and money market accounts. Based in Goshen, Ind., Praxis is a company of Everence.
The findings are based on a survey of 1,001 individual investors controlled for age, region and gender and 403 financial advisors across multiple distribution channels. The research was conducted by Bellomy Research in the fall of 2024. To download the full report, visit praxisinvests.com/research.
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