BMO expects to double adviser ESG sales in 2020

BMO expects to double adviser ESG sales in 2020

Fundhouse BMO expects the sales of its sustainable funds to UK financial advisers to be around 97 per cent higher in 2020 than the previous year.

Rob Thorpe, head of UK intermediary sales at the firm, told FTAdviser while adviser interest in sustainable investment had grown “exponentially" in recent years, this year interest had risen rapidly.

He expects this to continue next year, especially as the regulatory requirements on advisers around ESG change.

Mr Thorpe said: “The sales of our responsible investment funds to UK intermediaries rose by 43 per cent in 2019, and we forecast an increase of 97 per cent in 2020.

"Clients are becoming much more aware of the potential of responsible investment funds and while they are very fashionable now, and a lot of providers are launching ESG funds, BMO was the first in the UK to do this.”

Mr Thorpe said new rules being introduced in 2021 which require advisers to include ESG questions as part of their suitability assessments are likely to drive demand for such strategies in future.

He said: “Im not sure how many advisers are aware this is coming, it is something we have been discussing with them. But in terms of what it means for the market, I think it will lead to a lot more growth, as clients in the past may not have linked their own values with their investment portfolio, but when asked the question explicitly by an adviser that will change.”

BMO launched three multi-asset ESG funds at the end of 2019 as part of its Universal Multi-Asset fund range. The range has assets of £500m as the longest established products are approaching their three year anniversary. 

Mr Thorpe said he expects that within a few years, the ESG funds within the range will be bigger than the mainstream mandates.

Minesh Patel, an adviser at EA Financial Solutions, said the range of sustainable investment funds available to inventors has risen and "improved massively" in recent years.