Advisers are being urged by Hymans Robertson Investment Services to assess the impact of new sustainability regulations on their own businesses.
IFAs must understand how the FCA’s Sustainable Disclosures Requirements (SDR) impact their business, now that the Anti-greenwashing regulations and the SDR’s naming and marketing rules for investment products are in place, says the firm.
It points to three key considerations that advice firms should take to help them fully assess how these regulations affect them. Primarily they should focus on understanding how the regulations:
- fit within their advice process;
- align to previous client discussions; and
- relate to any previous verbal or written communications, including their websites and client brochures
Commenting on the value that will come from advisers assessing the impact of FCA’s new regulations on their business, William Marshall, Chief Investment Officer, Hymans Robertson Investment Services says: “SDR has the potential to impact all advisers. It considerably strengthens existing regulations affecting what advisers and investment managers are allowed to claim on sustainable investments.
“Unpacking how these regulations affect each adviser firm, and their advice on sustainable investments will take time, but given the regulations are now in place, it should be treated as a key priority.”
Marshall suggests that with more responsible investment related regulation likely in the future, firms should lean on the industry frameworks that already exist.
“For example,” he says, “the FCA’s anti-greenwashing guidance states any sustainability references need to be: Correct, Clear and Complete, and any Comparisons must be fair and meaningful.
“Firms should also recognise that sustainable investment is well-trodden path which means there are numerous examples of good and bad that can be used as a resource. Fims may, for example, look to those in the institutional investment arena who have been investing sustainably for many years. Taking advantage of their learnings can only be a good thing.”
Main image: sarah-dorweiler-QeVmJxZOv3k-unsplash.
