Alquity has today launched research on the knowledge gap of financial advisers (FA) around responsible investing. A survey of 400 global IFAs has revealed that many fail to even discuss responsible investment with their clients.
Research found that over a third (38%) of FAs said they had never discussed responsible investing with clients whilst almost a third (31%) of FAs admit they don’t know enough about it. In addition to this a staggering two thirds (66%) of those polled said they lack access to information on it.
However, when asked about the future, 82% think the market for responsible investment products will increase over the next 5 years. The size and growth of sustainable investing in Europe represents 64% of the €19.3t global market for sustainable investments in 2014, with the UK representing the largest market with a volume of €1.97t.
Many FAs confirmed that the decision to invest responsibly is driven either entirely or mostly, by their clients and in only 5% of cases is it based on the recommendation of the FA. Alongside the lack of available information around responsible investing, 32% of IFAs stated that they believe there are insufficient funds to choose from.
Paul Robinson, founder of Alquity commented: “Financial advisers still don’t understand responsible investment and there is a critical disconnect between the demands of retail investors who are looking at ethical investments and the traditional FAs. FAs need to wake up to the benefits of using ESG (environment, social, corporate governance) to drive investment performance and mitigate risks, before they miss opportunities for their clients and become dinosaurs in a world that is embracing responsible investing.
Alquity is also calling on more to be done by the asset management industry to provide clear and professional information regarding responsible investment. The onus is on our industry to communicate better and reach out to rather than lecture FAs.”
Adviser who wish to participate in the annual Blue & Green voice of the adviser survey, click here.