Advisers “lack understanding” of responsible investment

SRINearly a third of independent financial advisers (IFAs) internationally say they do not know enough about responsible investing and over 60% also say they lack access to information about it.

A survey commissioned by Alquity, a London-based responsible investments manager, found that in only 5% of cases do IFAs proactively suggest responsible investment portfolios, even though retail investors are the driving force behind growth in responsible investment, the firm says.

Saying there is a knowledge gap among IFAs around responsible investing, Alquity says there is also a “disconnect” between advisers and customers over the issue.

Paul Robinson, founder of Alquity, says: “IFAs still don’t understand responsible investment and there is a critical disconnect between the demands of retail investors, who are looking at ethical investments, and the traditional IFAs.”

He says IFAs need to “wake up” to the benefits of using environmental, social and governance, or ESG, investing to drive investment performance and mitigate risks. IFAs that do not harness this will become “dinosaurs in a world that is embracing responsible investing”.

However, as well as saying there is a lack of information about responsible investing, 32% of the IFAs also said the number of funds was insufficient.

Alquity commissioned a survey of 400 advisers, 70% of whom were in the UK.

©2015 funds europe