ESG Investing  

Advised clients more likely to buy ESG

Advised clients more likely to buy ESG

Advised clients are more likely to increase their sustainable investments in the coming months, research has shown, in a sign advisers are becoming more receptive to ESG investing.

Data from Boring Money showed some 28 per cent of advised clients planned to invest in line with environmental, social and governance principles over the next six months, compared to 20 per cent of non-advised investors.

This is the reverse of what has typically been argued, with advisers often blamed for the slow take up of sustainable investing in the UK retail space. 

ESG campaigners have long held the view that a lack of knowledge and ‘myths’ surrounding sustainable investing have minimised advisers’ use of ESG.

Boring Money polled 1,500 investors, 813 of which were advised, earlier this month and found that in general, a quarter (24 per cent) of all fund investors planned to increase their holdings in the sustainable sector over the next half year.

Holly Mackay, CEO of Boring Money, said: “We’ve seen significant acceleration of interest from consumers, but many adviser firms are not well prepared to cater for either this greater demand or the suitability requirements coming fast down the track.

“It is particularly interesting to see the growing appetite among advised female investors, who historically have been less engaged or interested than men.”

Among the advised clients polled, sustainable investments drew the younger crowd, with 34 per cent of those aged between 18 and 44 saying they had plans to increase their holdings.

Women also expressed a greater interest in ESG funds than men. A third (32 per cent) of female investors with a financial adviser planned to increase their holdings, compared to 26 per cent of advised men.

Some 38 per cent of advised women already hold sustainable investments, compared to 31 per cent of advised men.

Environmental, sustainable and governance (ESG) investing takes into account ESG factors alongside financial markers in the investment decision-making process.

It has become a more commonplace part of the global investment space in recent years, and there have been numerous ESG fund launches as asset managers look to capitalise on the trend.

The ESG trend is likely to continue. Amendments to Mifid II (expected to come into force in Q1 2021) will mean advisers will need to be more proactive with customers in relation to ESG considerations by asking them about their preferences.

imogen.tew@ft.com

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