Just one fifth of advisers plan to fully integrate ESG investing into clients’ portfolios, with the majority opting for a core/satellite approach that uses badged ESG solutions, according to NextWealth.
NextWealth’s ESG Tracker Study found that advisers expect two thirds of their client money to be invested in conventional funds with no specific ESG, ethical impact or sustainable criteria, while 13% will choose badged funds or solutions with specific sustainable investment or carbon reduction objectives.
Among advisers using badged funds, the preference was for those badged as ESG (64%), ethical (64%) and sustainable (63%). At the other end of the scale was thematic (7%) and impact (6%).
Heather Hopkins, managing director of NextWealth, says: “Whether or not one agrees with the recent flurry of ESG badged product launches, fund managers have recognised that in order to capture assets for clients interested in investing in this way, they will need badged funds and solutions. It’s currently what financial advisers are most comfortable using.
“Interestingly, there is significant overlap in usage of these products, suggesting that the badge itself is less important than having a badge.”
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