Rise in queries but Aegon highlights barriers to ESG investing by advisers

More than four in 10 (41%) of financial advisers have reported an increase in queries about ESG investments, Aegon’s latest Adviser attitudes report has revealed.

This comes after figures from the The Investment Association in March showed that UK savers put almost £1bn a month on average into ESG funds in 2020, a total up 66% on the previous year.

However, Aegon suggested that advisers are facing a number of difficulties as they integrate ESG into their investment propositions. The report highlighted a degree of frustration among advisers at the lack of maturity of this market, with 84% citing barriers to integrating ESG

Despite the high level of interest, the findings also revealed a lack of knowledge and understanding among both clients and advisers surrounding ESG. The research, based on the views of 251 UK financial advisers, found that only 2% of advisers felt their clients understood ESG well, with the remaining 98% citing a need for further education and improved awareness of the options available.

Furthermore, 38% of advisers said they themselves found ESG research confusing, while 24% said they found a lack of information available on ESG. Aegon suggested this points to a need for providers to improve, not only the quality of educational material on the subject, but also to better report on the solutions they offer in terms that are clear and accessible to all. Another 26% of advisers said the lack of ESG across different asset classes meant they couldn’t build rounded portfolios.

Aegon managing director of investment solutions, Tim Orton, commented: “ESG is no longer an optional extra. There is a real opportunity to help advisers cut through the marketing messages so their clients can connect their savings with the ability to make an environmental or social impact.

“Our research shows that the industry is not moving fast enough in terms of clarity and consistency – which is a source of frustration for advisers and their clients.

“The government’s green finance agenda puts UK financial services at the forefront of this opportunity and as an industry we need to increase transparency so clients and their advisers can make informed decisions about their investments.”

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