Advisers don’t need to be experts on ESG investing to work with clients

While financial advisers should be savvy on ESG (environmental, sustainable and governance) investing, they don’t necessarily need to be an expert on the subject when working with clients according to the general manager of a managed accounts group.

In a new opinion piece published on ifa, Implemented Portfolios’ general manager – partnerships and distribution, Phil Pilgrim, acknowledged that knowledge and skill on ESG investing is required for an adviser, but there is a bigger challenge.

“I think advisers may sometimes fall into the trap of believing this, but it’s my belief that being an ESG investing expert is precisely not what you need to be. Going down that road leads to perpetuating the current problem of aligning your value proposition with your investment management skills, which is a problem that many forward-thinking Advisers are trying to escape,” Mr Pilgrim wrote.

“An effective adviser/client ESG conversation is about soft skills, valuable communication and the relationship every successful adviser today leverages to help clients articulate a better understanding of themselves and what is most important to them in their life.

“Once you have achieved this level of understanding, setting goals becomes so much more meaningful and articulates perfectly where the trusted adviser adds value.

“Great advisers help people live better lives.”

Read the full opinion piece here.

Mr Pilgrim’s comments come after a new study found that the Asia-Pacific region is leading the world on ESG adoption.

Capital Group’s ESG Global Study, based on a survey of 1,130 institutional and wholesale investors across 19 markets, revealed that ESG adoption in the Asia-Pacific region grew to 88 per cent versus 81 per cent recorded in 2021.

Meanwhile, research conducted in February by behavioural finance experts, Oxford Risk, found that 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.

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.