The study, From Values to Riches 2022: Charting consumer demand for responsible investing in Australia, revealed that knowing about responsible investment is now the top expectation of financial advisers.
Over 1,000 Australians surveyed this year expect their advisers to be knowledgeable about responsible investment, which increased from 54 per cent in 2020 to 64 per cent in 2022.
“The bar is raising for financial advisers,” RIAA CEO Simon O’Connor said.
“The number one expectation Australians now have of financial advisers is to be knowledgeable about responsible investment overtaking the prioritisation of investment returns for the first time (58 per cent).”
The figures aligned with the overall findings of the study, which showed that Australians are getting more serious about aligning their money with their morals.
74 per cent of Australians are considering moving to another provider if they found out their current fund was investing in companies inconsistent with their values.
“Australians are demanding more transparency from their providers, with 75 per cent wanting to know which companies their super fund, bank or other investments are invested in,” Mr O’Connor said.
“They are attuned to the threat of greenwashing, and it is holding many people back, particularly when it comes to switching to an ‘ethical’ bank.”
The findings come only weeks after research from behavioural finance experts, Oxford Risk suggested advisers face losing clients over a perceived lack of focus and commitment to ESG investing.
According to 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.
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 Davies, PhD, head of behavioural finance, Oxford Risk.
“In particular, deployment of cash into new investments will greatly favour strong ESG propositions.”
Found the opposite to some commentators here. Whilst people don’t specifically ask for this, and don’t really want a very deep green “ethical fund” …they’re now expecting an ESG filter to be in the investment process and investing in areas that do no harm are increasingly becoming important and critical. I’m also finding firms with an ESG filter in their stock selection process are outperforming.
More lies to suit a marketing agenda, this industry needs new leaders in EVERY sector, the so-called FPA should be banned for being at the wim of the product providers for so long, the AFA, well we all know what a waste they are and ASIC/AFCA are the political arms of the banks so the government looks good.
Maybe if these ESG funds lowered their fees, the clients might get interested.
Had one client in my 35 years history request this option…after two years in the fund he switched out and went into Bitcoin….
the problem with the so called “bar” pushed by the FPA – is that treasury and ASIC and duped into believing this “bar” will fix the problem. the problem with financial planning is when something goes wrong – the adviser has egg on his face – which is no fault of the advisers. This is something that ASIC and treasury don’t understand.
I have never had a client ever ask me about this issue!
I hadn’t either but I have had 4 this year alone..
absolutely- these are exaggerations to get people to move money to underperforming funds where they can “virtue signal”. Well the rest can enjoy better returns and more comfortable retirement lifestyles.
WOW that’s hard to believe
Well, that’s a surprise – a lobby group conducts a survey, which comes up with all the answers they wish to hear. Who would have thought!
What rubbish. Most clients when asked if they want to invest for long term growth and income, or to get a warm and fuzzy feeling will chose the former.