Rise in advisers considering sustainable investments

More than two in five (43%) financial advisers are now saying they consider sustainable investments when building retirement portfolios, new research published by Aegon has found.

The figure is an increase from a third (33%) when Aegon carried out the research last year.

Aegon said that its findings, which were based on a study with 212 financial advisers, indicated there has been a comparable fall in those considering sustainable investments only at the client’s request, 47% compared to 57% the previous year. The pensions provider highlighted that more advisers are embedding sustainable investing into their processes rather than being led by requests from their clients.

Furthermore, the research revealed that small number (3%) of advisers are applying a strict ESG screening to all funds when building retirement portfolios, which was unchanged from the previous year.

The research also looked at whether appetite for sustainable investing differs from retirement clients to pre-retirement clients. The majority of advisers (66%) said preferences were the same across their client base, although 12% of advisers said sustainable investing was more relevant for retirement clients, while 14% said it was less relevant for retirement clients.

Aegon head of responsible investment, Hilkka Komulainen, commented: “It’s positive to see that more advisers are embedding sustainable investing into their processes and increasingly raising this with retirement clients. There is still more progress needed but with new regulation on Sustainable Disclosure Requirements (SDR) on the horizon, we may see an even greater number of assets move towards sustainable funds and solutions.

“The lack of industry standardisation means advisers have faced challenges when dealing with the different sustainable investing considerations, but the new rules on the classification and labelling of sustainable investment products should better support advisers and their clients to make informed decisions.”

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