'Critical disconnect' between IFAs and responsible investment revealed
A survey of 400 global Independent Financial Advisors (IFAs) has shown that many fail to even discuss responsible investment with their clients.
Research from Alquity, the responsible investment manager, found that over a third (38%) of IFAs said they had never discussed responsible investing with clients whilst almost a third (31%) of IFAs 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 IFAs 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 IFA. 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: “IFAs 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 IFAs. IFAs need to wake up to the benefits of using ESG 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."
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