IFAs want additional ratings to support client interest in ESG

A total of 57% of IFAs would like a greater supply of ratings for ESG products to support client interest, according to latest research by HSBC Global Asset Management.

The study, which surveyed 204 UK IFAs, found that only 13% of IFAs think that the current ratings available for ESG products are sufficient.

Among IFAs who said that they have seen less or no change in demand over the past year, only 9% stated that investing in an ESG strategy might mean sacrificing returns, demonstrating that the vast majority of IFAs believe that ESG strategies are good investment opportunities that can help meet client objectives.

A limited understanding of ESG issues and the potential long term impact on investment portfolios is the single main reason impacting client demand for ESG products (34%), according to survey respondents.

HSBC Global Asset Management head of UK wholesale Daniel Rudd commented: “Investor interest in ESG issues continues to grow rapidly. However, what we’ve found is a considerable lack of information to adequately explain these issues and their impact on companies and in turn, investments.

“Given the complex and diverse ways of implementing ESG, it can be difficult for financial advisers to effectively inform their clients without detailed information and robust ratings. Our research shows that there is a significant opportunity to better equip IFAs. We will continue to strive to educate our clients and the markets about.”

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