ESG Investing  

Having children changes investor attitudes to risk and ESG

Having children changes investor attitudes to risk and ESG

Having children changes investors' risk tolerance and attitude towards ESG investing, according to research from Barclays Wealth.

A survey carried out in March found 72 per cent of investors chose to invest in lower risk options after having children.

Additionally, 55 per cent of the 2,007 investors surveyed said they made more of an effort to invest sustainably for their family, with 62 per cent of mothers and 50 per cent of fathers saying so.

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However, when looking at their own portfolios, two in five of those surveyed said the pandemic had encouraged them to take more risks with their investments, and that expected dividends were more than twice as important to an investor than ESG credentials (30 per cent versus 14 per cent).

Richard Whitaker, founding partner at Sandringham Financial Partners, said he has not seen a shift in clients’ ESG focus after they become parents, however, he agreed the event did change their wider perspective.

“When you have children, you have to become more responsible anyway because you’re thinking of the future for your progeny. You want to take fewer risks personally and you want to make sure [your capital] is protected.”

Instead, Whitaker saw the most change in clients as they approach retirement age.

“It’s more when they get closer to retirement, [clients have to be aware of] not only their risk profile but their capacity for loss. 

“If they’re not in a position to replace capital, that means they’re more likely to go for lower risk investments.”