Dynamic Planner has launched a new tool to enable advisers to understand their clients’ appetite for sustainable investing.
The psychometric questionnaire aims to provide advisers with a “robust and repeatable” process to hold sustainability conversations with clients and help overcome the challenges advisers face when talking to clients about ESG.
The questionnaire was developed by Dynamic Planner’s head of psychology Louis Williams in consultation with focus groups of advisers and tested by 1000 investors.
A series of questions will help advisers to measure clients’ psychological distance; personal values; emotional benefit; positive impact and financial considerations.
Louis Williams, head of psychology and behavioural insights at Dynamic Planner, said: “Sustainable investing is not a straightforward tick box exercise. Preferences can be complex, encompassing an incredibly broad range of factors. Expectations of the impact it can have can be misjudged, along with the importance and balance clients place on potential returns and their sustainability preferences. The key to fully understanding the ESG and sustainability hopes and expectations of a client is real engagement, so that their preferences can be accurately captured and the implications of their choices discussed.”
Williams said that emphasis is often placed on understanding the impact companies have concerning ESG, with little headway made in helping clients to understand the bigger picture.
He added: “Bringing together psychology and statistics in the form of our Sustainable Investing questionnaire enables us to help advisers cut through the noise and really understand how someone might feel and act both in the short and long-term. Successful investment and sustainability conversations pivot on a clear understanding of someone’s goals.”
Ben Goss, CEO at Dynamic Planner, commented: “Our psychometric Sustainable Investing questionnaire is an industry first, built on a combination of the robust academic thinking of schools of psychology and statistics. And importantly, in tandem with investors and advisers.
“Our team has the experience of successfully creating a risk profiling questionnaire that has supported more than one million clients of advice firms since 2013. What we are launching now is built on a similar formula, to capture a client’s sustainable investing preferences – an extension of our suitability process with the extra ‘s’ of sustainability.”
The questionnaire will be used alongside Dynamic Planner’s Sustainable Investing Insight launched in February to allow advisers to create “bespoke” financial plans in line with clients’ ESG preferences.
