Wealth Managers Expect ESG To Flourish - Survey

Robbie Lawther

15 May 2018

A survey of UK-based financial professionals and investors found that nearly two-thirds (65 per cent) of them expect to use more of their economic muscle to push environmental, social and government investment ideas, part of a continuing trend around ESG strategies.

surveyed 100 wealth managers, financial advisers and institutional clients based in the UK for its annual investment conference.

Wealth managers and clients agreed on ESG investments were improtant; more than 70 per cent of clients said ESG issues were now somewhat or very important to them when selecting an investment strategy or fund manager.

Investment threats
The survey also looked at the biggest challenges facing markets during the coming year. Rising interest rates and inflation were at the top of the list: two fifths (40 per cent) said his was the biggest threat to investors. This is a big jump from the 26 per cent who went for this option in 2017.

A further 12 per cent highlighted the risk of corporate defaults, while 22 per cent pointed to the risk of trade wars.

Concerns about Brexit had decreased from 2017, as 22 per cent saw it as the biggest threat during 2017, but this year the number halved to 11 per cent.

“The findings of this survey mirror many of the discussions we’ve been having with clients over the past year, and show that ESG is increasingly becoming an integral part of the investment process for many advisers and institutions,” said Rob Williams, chief distribution officer at Royal London Asset Management. “As the sector becomes increasingly competitive, we think that advisors will begin to dig much deeper into what these approaches really mean for the underlying funds. The debate is already shifting rapidly from whether a fund simply considers ESG issues, to a more sophisticated discussion about how investment strategies implement these considerations on a practical level. We think that fund management firms have an important role to play in helping advisors get to grips with investing sustainably, and helping them to educate their clients on the tangible benefits that this can provide.”