Responsible Investing: The New Normal  

How suitability has changed for ESG investing


Advisers need to make sure they "strengthen" their suitability processes for the new world of ESG investing, according to the guests on the latest episode of FTAdviser’s podcast series.

The series, Responsible Investing: The new normal, is sponsored by Royal London.

Appearing on the latest episode, Mark Greenwood, director of compliance services at SimplyBiz, said current guidance meant advisers should no longer be asking a single question during the fact find process to establish whether their clients are interested in ESG investing.

He said: "It is all about having the processes in place if the client answers 'yes' to that question.

"The benefits of having a centralised investment proposition are the consistency of approach throughout a firm but then if a client has particular ESG preferences would they fit that centralised investment proposition? Will firms deal with that type of client on an individual, client-by-client basis or have an ESG proposition?"

Ryan Medlock, senior investment development and technical manager at Royal London, agreed.

He said: "How advisers go about building ESG considerations into their centralised investment propositions and centralised retirement propositions is going to be a really significant theme for the next few years."

Mr Medlock added the expectations advisers faced on this from regulators would go a lot further than "planting a couple of additional questions in the fact find".

He said: "Adviser research and due diligence processes are going to need strengthening to fully capture this consideration."

You can listen to the podcast by clicking play on the video above or by going to Acast, Apple Podcasts, Spotify or Stitcher.