The number of advisers who report the sustainability of their investments back to all clients has jumped by nearly a third (29%) over the last 12 months, according to a new report by NextWealth.
The NextWealth Sustainable Investing Tracker Study showed 38% of advisers now report to all clients, while the share that are not able to report fell from 41% to 28% year on year.
However, NextWealth said many advisers continue to lack confidence in their process to report on sustainability, which presents “great opportunities” for product providers to support advisers.
FE fundinfo and Morningstar are the most widely used providers of sustainable investment ratings and information. NextWealth said it has seen growth across the board in the last two years in use of data providers, with 50% of advisers currently using externally generated assessments and ratings to report the sustainability of investments to clients.
However, when NextWealth recently interviewed advised clients about badges and ratings, clients overwhelmingly said they don’t trust them and want context from advisers on their credibility and meaning.
Heather Hopkins, managing director of NextWealth, said: “Our latest report shows that interest in raising the topic of sustainable investing has fallen 10% from six months earlier, to just 12%. Advisers tell us this is a combination of issues such as performance, cost of living and inflation, which are all much higher up clients’ agendas than they had been.
“The good news is that the level of sustainable-related assets hasn’t dropped which shows clients and advisers are seeing the long-term benefits of choosing this route.”
