‘Good business sense’ for advisers to recognise demand for sustainable investing

Financial advisers must consider incorporating sustainable investing in their service offering on the back of findings from a new survey, according to the founder and CEO of Ethical Invest Group.

This week, Fidelity revealed that a survey it conducted with over 12,000 respondents across six APAC markets — Australia, Japan, China, Hong Kong, Singapore and Taiwan — found that more than 60 per cent of retail investors now recognise the importance of sustainable investing.

More than half — 54 per cent — of respondents expressed a desire to use their money to make a positive change and 56 per cent believe that investors have the power to change corporate behaviours through their own investing actions.

Speaking to ifa, Alexandra Brown said the survey results highlights the important role financial advisers play in sustainable investing.

“It makes good business sense for advisers to recognise the growing demand for sustainable investing and incorporate this in their service offering,” Ms Brown said.

“Investors want to create positive change, and clients want to know their adviser can help them with this.”

Ms Brown also noted a study released by Responsible Investment Association Australasia (RIAA) in March which found that over 1,000 Australians who were surveyed expect their advisers to be knowledgeable about responsible investment, which increased from 54 per cent in 2020 to 64 per cent in 2022.

The study also revealed that 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.

In Fidelity's survey, 46 per cent of investors said they felt the definition for what qualifies as sustainable investing seems “subjective, with a lack of clear definitions for investment managers to follow”

A further 49 per cent said they feel that sustainable investments and their providers lack regulatory oversight in relation to the promises they make.

Ms Brown said being “knowledgeable” about responsible investments means understanding and recommending investments that take into account ESG, sustainability, and client values.

“Advisers are the integral link in connecting clients with investments that align with their true needs,” she said.

“Values-based advice is becoming a crucial element in an investor's choice of adviser, and those who understand this and can provide personalised advice are highly sought after.”

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.