While not among the top three priorities for investment selection among advisers, responsible investing could soon prevail having been declared the fastest growing priority area in Investment Trends’ latest market report.
In fact, according to an in-depth study of asset allocation trends, almost two in three advisers admitted that client demand would be the biggest driver for ESG investing.
The study found that 27 per cent of local financial advisers now find responsible investing a top priority – outpaced only by diversification (68 per cent), capital growth (37 per cent) and liquidity (31 per cent).
Additionally, surveyed advisers revealed that in the last 12 months they were asked by over 40 per cent of clients to buy or sell investments based on environmental issues, up from 24 per cent in 2020.
The next step for advisers, according to Investment Trends, is prioritising education. Namely, as part of its research, the research firm found advisers were interested in bettering their understanding of responsible investments, including performance, cost and screening criteria.
Commenting on the findings Kurt Mayell, associate research director at Investment Trends, said: “[A]dvisers who are prioritising ESG investments expect to use a wider range of products or increase their use of active management.
“To enable the growth of ESG investing, advisers believe that product providers should put as much effort into research and data analytics as they do on new product issuance.”
The new research also revealed a high uptake of managed accounts and ETFs among advisers.
Is there any potential conflict in attempting to satisfy both a clients financial best interests and their stated socio/ethical
best interests, at the same time?
If so – could ASIC perhaps put out an RG to give us some guidance?