‘The bar is raising’: New study reveals top expectation of financial advisers

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.”

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.