Advisers risk losing clients over lack of ESG focus

New research has suggested advisers face losing clients over a perceived lack of focus and commitment to ESG investing.

According to new research from behavioural finance experts, Oxford Risk, two out of three retail investors are considering transferring their investments to a new adviser purely based on their current adviser’s engagement with ESG.

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In fact, one in five said they have already done so or intend to do so.

“Advisers who do not demonstrate a commitment to and focus on ESG investing will lose clients, and investors are ready to move money to new advisers if they are unhappy,” said Greg B Davies, PhD, head of behavioural finance, Oxford Risk.

“In particular, deployment of cash into new investments will greatly favour strong ESG propositions.”

Delving deeper into the matter, Oxford Risk found that 7 per cent of clients rate their adviser’s ESG focus as poor or very poor.

Moreover, Oxford Risk revealed that as many as 40 per cent of clients had moved some of their investments, including pension pots, into ESG funds over the past year, while 61 per cent said at least some of their investments are ESG-friendly.

The researcher also flagged technology as key to grasping the opportunities and meeting the responsibilities of matching socially minded investors to suitable ESG investments.