Dynamic Planner has added a wealth of sustainable investing fund research to its tools in a bid to help advisers match clients to suitable portfolios.
Advisers using the risk profiling business now have access to the MSCI environmental, social and governance fund research, used widely by institutional investors.
It provides access to research across 36 ESG issues for more than 36,000 funds, derived from the analysis of 8,500 companies and more than 680,000 equity and fixed income securities globally.
Ben Goss, chief executive at Dynamic Planner, said: “The rise of sustainable investing has been one of the most important developments in our industry for decades – evolving from being driven by institutional investors to being led by something of an investor revolution and momentum is building.
“We believe it is right that suitability and sustainability should go hand in hand, and advisers now need the tools to help facilitate great conversations with their clients about both the investment risks and opportunities driven by global environmental and social challenges.”
Dynamic Planner hopes the sustainable investing insight will enable advisers to ensure their clients fully understand both the ESG opportunities and risk that their investments present, as well as supporting advisers to meet the fast-evolving regulatory requirements.
It is the first stage of Dynamic Planner’s investment in the sustainable space, with further work on questionnaires, fund research and analysis functionality set to be launched later this year.
Dynamic Planner recently extended its client reporting tool to help advisers address all aspects of Mifid II regulation, in particular pinpointing the impact of any portfolio changes in relation to risk and return.
Jim Henning, head of investment services at Dynamic Planner, said helping advisers having good, objective conversations around sustainable investing as part of their suitability conversation was core to its offering.
He added: “What we have produced is an extension of our suitability process with the extra ‘s’ of sustainability.
“Advisers will now be able to match client preferences with in-depth research and fully understand the risk of what they are holding, all in one place.”
ESG investing has boomed in popularity in recent years as fears over climate change have led investors to consider the impact of their money and as a growing number of millennials have begun investing.
Recent data from Morningstar showed global assets in sustainable funds hit £1.21trn by the end of 2020, a record high, after investors pumped £111bn into such funds in the final quarter of the year alone.
Amendments to Mifid II – requiring advisers to incorporate clients’ sustainability preferences as part of the suitability process – have not be onshored from the EU, despite originally being expected to come into force in the first quarter of 2021.
However it is likely the Treasury will follow the EU’s direction of travel on these matters, with changes to suitability rules to include sustainability issues still expected in the next few years.