The number of advisers who report to all clients on the sustainable nature of their investments has jumped by 29% in 12 months. Over one third (38%) of financial advisers now report to all clients, while the share that are not able to report fell from 41% to 28% year on year. This is according to the latest NextWealth Sustainable Investing Tracker Study.
Heather Hopkins comments: “While it’s good news that the percentage of advisers who report on the sustainability of investments to clients is growing, many advisers lack confidence in their process to do so. This presents great opportunities for product providers to support advisers with this. Currently, half of advisers use externally generated assessments/ratings to report to clients.”
FE fundinfo and Morningstar are the most widely used providers of sustainable investment ratings and information. NextWealth has seen growth across the board in the last two years in use of data providers. Currently, 50% of advisers use externally generated assessments/ ratings to report the sustainability of investments to clients.
However, when NextWealth recently interviewed advised clients about badges and ratings, these clients overwhelmingly said they don’t trust them and want context from financial advisers on their credibility and meaning.
Interest down but assets hold steady
Heather Hopkins comments: “Our latest report shows that interest in raising the topic of sustainable investing has fallen 10% from six months earlier, to just 12%. Advisers tell us this is a combination of issues such as performance, cost of living and inflation, which are all much higher up clients’ agendas than they had been.
The good news is that the level of sustainable-related assets hasn’t dropped which shows clients and advisers are seeing the long-term benefits of choosing this route.”
