The company says that in addition almost a third (31%) of IFAs admit they don’t know enough about responsible investing, while 66% say they lack access to information on it
Alquity has undertaken research on the knowledge gap of IFAs around responsible investing. A survey of 400 global IFAs has revealed that many fail to even discuss responsible investment with their clients.
When asked about the future, 82% of advisers think the market for responsible investment products will increase over the next 5 years. The size and growth of sustainable investing in Europe represents 64% of the €19.3trn global market for sustainable investments in 2014, with the UK representing the largest market with a volume of €1.97trn.
Many IFAs confirmed that the decision to invest responsibly is driven either entirely or mostly by their clients and in only 5% of cases is it based on the recommendation of the IFA. Alongside the lack of available information around responsible investing, 32% of IFAs stated that they believe there are insufficient funds to choose from.
Paul Robinson, founder of Alquity, said: “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.
“IFAs need to wake up to the benefits of using ESG to drive investment performance and mitigate risks, before they miss opportunities for their clients and become dinosaurs in a world that is embracing responsible investing.
Alquity is also calling on more to be done by the asset management industry to provide clear and professional information regarding responsible investment. The onus is on our industry to communicate better and reach out to rather than lecture IFAs.”
In July 2015, Alquity carried out a survey of 400 Independent Financial Advisers (IFAs) in a questionnaire prepared by QuestionAir Marketing Research Ltd. 96% of those polled were FCA registered and 85% invested in emerging markets equity classes. 70% of the sample practiced in the UK with the remainder in the Middle East, Asia, Latin America and Africa.