John David, head of Rathbone Greenbank Investments says: "ESG investment appeals to people of all ages. Of course on average those later in life have accumulated more wealth but we are starting to see an inter-generational transfer of assets and it is certainly true that younger generations score highly when asked about their interest in issues such as climate change, or sustainability more generally.
"Talking through a client’s sustainability preferences can be an excellent way to get to know a client – some will trust that their investments are managed to an acceptable ESG standard but others will hold much stronger views, and these are best established at the outset of a relationship."
Tailor the discussion
As with any client conversation it is important to tailor the discussion to the individual’s knowledge and experience but this is not necessarily determined by age
Scott Gallagher, director at Rowley Turton Private Wealth, says: “Many mature investors are interested in exploring it and typically warm to the idea once they realise that it no longer necessarily needs to be a compromise between ethics and investment success.
“There still seems to be a mis-match between, on the one hand, the industry press I read which emphasises more and more the value and range of ESG options and, on the other hand, interest expressed by clients.
“In any event, the young typically have less money and so by definition have less impact on investment direction. I think that as that demographic ages it will become more and more important – although always with the caveat that, for most, investment returns come first and ethical considerations second.”
Ms Harle says while uncertainty remains on the regulatory environment for financial advice and ESG, it is probably best to start from the assumption that this is an interest from investors that is going nowhere, with demand expected to increase.
“But for now, it is important to have the conversation with clients of all ages,” Ms Harle says.
“Many people struggle to understand investments so initiating the conversation about ESG and explaining it in simple terms will allow them to make the decision that is right for them.
"Advisers can get incredibly close to a client and really understand them, so don’t be afraid to use your intuition and discuss things you think they may be interested in from a responsible investment perspective.
