What happens when five controversial letters that have dominated the headlines in 2023 get together and hang out? For one investing expert, you get a potential recipe for disaster. 

Marcel Stotzel, a portfolio manager with Fidelity International, says ESG fund managers who turned to big tech as a low-carbon, high-return bet are getting anxious as the sector experiments with artificial intelligence.

He fears what he calls "an AI blowback," which is when something unexpected triggers a meaningful market decline. 

"It takes just one incident for something to go wrong and the material impact could be significant," he said. Some of the tech that is causing concern are things like fighter jets with self-learning AI systems. 

And because of how it embraced tech, the ESG investing industry may be more exposed to such risks than most. Funds registered as having an outright environmental, social and good governance objective hold more tech assets than any other sector, according to Bloomberg Intelligence. 

And the world's biggest ESG exchange-traded fund is dominated by tech, led by Apple, Microsoft, Amazon and Nvidia. 

Speaking of ESG, Christopher Knapp, managing director and principal at Robertson Stephens, joined me on the Financial Planning Podcast this week to explain why advisors shouldn't sidestep difficult ESG conversations with clients.

For him, sustainable and green investing are fiduciary issues, not political issues. And advisors can play a crucial role in providing much needed understanding related to ESG investing.

Check out the story, the podcast and more, only at Financial Planning. 

Anything else on your mind? Drop me a line at justin.mack@arizent.com. Have a great weekend, everyone!

Regards,
Justin

Morgan Stanley likes prospects in Silicon Valley

By Dan Shaw       5 min read

Brian McDonald, head of Morgan Stanley at Work, spoke with Financial Planning about how the firm aims to extend its roots in Silicon Valley and build on equity compensation offerings. Read story →

5 ways financial advisors can maximize client 401(k)s

By Courtney Hoff, Stewart Bowling      

Changes under SECURE 2.0 that will impact contributions and retirement plan "leakage" when investors cash out instead of rolling over their 401(k)s are two of the issues advisors can help with. Read story →

ESPN's Jay Williams wants athletes to be active participants in their finances

By Justin L. Mack       3 min read

The basketball great and sports analyst says as opportunities grow for athletes and entertainers, so does the need for greater financial competency.  Read story →

Keep these factors in mind as you search for your next job in finance

Matt Middleton plans to turn Future Proof into a citywide experience

By Justin L. Mack       2 min read

From the fans to the naysayers, the CEO of Advisor Circle says his team can't wait to host them in California as they march toward their goal of 10,000 attendees. Read story →