It would seem that the time has come for any lingering concerns about the performance of responsible investment portfolios to be finally laid to rest as according to a new report, Responsible Investment and Wealth Management: Opportunities for the future, 90 per cent of wealth managers say their RI portfolios have performed the same or better than unscreened ones.

The report, which was produced by Experts in Responsible Investment Solutions in conjunction with WealthBriefing, and sponsored by Kleinwort Benson Private Bank, is based on a global questionnaire survey, along with an expert panel discussion and interviews carried out during the summer of 2009 – and so gives some striking insights into how the financial crisis has affected attitudes towards RI.

One of the report’s key findings is that 55 per cent of wealth managers are more likely this year to look at governance and impending regulatory issues in their clients' portfolios. According to the report, assessing companies on environmental, social and governance issues is now high on the agenda for a growing number of wealth managers.

Correspondingly, the report’s expert panel believed that more stringent examination of ESG issues could have acted as a potent form of risk mitigation during the crisis – one which, while it wouldn’t have “saved” clients, may have minimised losses.

The report also highlighted the increased amount of client “churn” which has resulted from the crisis and pointed out that bespoke RI capabilities could be just the “differentiator” that firms are seeking for retaining and attracting clients. The report found that just 30 per cent of wealth managers are now less likely to offer a RI to their clients and this would seem to augur a healthy future for this increasingly mainstream investment approach.

One outcome of the financial crisis is that investors want to know more about their investments than perhaps ever before, and environmental, social and governance related issues are increasingly regarded as key criteria when determining the viability of an investment.

Comments from the report’s experts also indicate that high net worth clients are increasingly rejecting the “short-termism” which arguably forms part of the backdrop of the crisis in favour of responsible, sustainable investment over the longer term.

A recurring theme from the report, and perhaps the most salient, is that RI is not just about ethical preferences, but rather should be seen as the safe and prudent option, and wealth managers which neglect the burgeoning client interest in responsible investment risk missing out on an area of huge potential growth.

“Client retention is increasingly a challenge and wealth managers can improve retention rates and gain a competitive advantage by responding to the increasing numbers of HNW individuals who are expressing an interest in responsible investment,” said Victoria Woodbridge, senior client relationship manager at EIRIS.