Aegon research reveals adviser ESG traction

4 June 2022

Sustainable investments are gaining traction among advisers, new research from Aegon has shown.

More than two fifths (43%) of advisers consider sustainable investments when building retirement portfolios, an increase from 33% the previous year.

At the same time, the number of advisers who consider sustainable investments only at client request fell to 47% compared to 57% the previous year, suggesting more advisers are embedding sustainable investing into their processes rather than being led by requests from their clients.

The research also explored whether appetite for sustainable investing differs from retirement clients to pre-retirement clients. The majority of advisers (66%) said preferences were the same across their client base, while 12% said sustainable investing was more relevant for retirement clients and 14% felt it was less relevant for retirement clients.

Further regulatory reform is also likely to increase appetite for sustainable investments, according to Aegon. The FCA is set to consult on proposed rules to implement Sustainability Disclosure Requirements (SDR) for asset managers and owners and will better support advisers by increasing transparency and improving consistency of fund labelling.

The majority of firms appear prepared for regulation, with 81% of advisers expecting little or moderate impact, however 14% are expecting a significant impact.

Hikka Komulainen, head of responsible investment at Aegon, said: “It’s positive to see that more advisers are embedding sustainable investing into their processes and increasingly raising this with retirement clients. There is still more progress needed but with new regulation on Sustainable Disclosure Requirements on the horizon, we may see an even greater number of assets move towards sustainable funds and solutions.

“The lack of industry standardisation means advisers have faced challenges when dealing with the different sustainable investing considerations, but the new rules on the classification and labelling of sustainable investment products should better support advisers and their clients to make informed decisions.”

Professional Paraplanner