Our latest survey uncovers the research, data and product‑related obstacles paraplanners encounter when recommending ESG investments. From inconsistent ratings to unclear fund methodologies, respondents describe a landscape that is often harder to navigate than traditional investment analysis.
Recommending ESG and sustainable investments is presenting paraplanners with a specific set of challenges, according to our latest Parameters Survey.
While ESG demand itself may ebb and flow, paraplanners told us that the process of researching, comparing and justifying ESG solutions remains one of the more complex areas of their role.
When asked about the biggest challenges they face, paraplanners’ most frequently selected concern was performance and client scepticism, chosen by 61% of respondents.
Many noted that ESG portfolios have struggled against traditional strategies, making recommendations harder to justify.
One paraplanner told us: “Some clients who have holdings in this area have switched out due to persistent poor performance.”
Another added: “Traditional investments have posted noticeably better returns, clients have tended to prioritise returns over sustainable credentials.”
Costs were also highlighted, with comments such as: “Charges are generally higher,” and “Cost also an issue at times.”
The second most common challenge, cited by 45%, was the lack of consistency in ESG ratings and data between providers.
This theme generated some of the strongest responses. One paraplanner described the comparison process as difficult and time‑consuming: “A lot of the ratings and data between providers seems to differ.”
Another said that an industry‑wide standard would make the work significantly easier: “It would be beneficial to have a rating that applies across all ESG investments. It would help ensure we’re basing recommendations on the correct and relevant data.”
A further 28% pointed to limited suitable products or unclear fund methodologies. Several respondents suggested that even when products exist, the explanations of what counts as “sustainable” or “ethical” are not always transparent.
Some also highlighted that their firms do not maintain a dedicated ESG proposition: “We don’t have an ESG proposition and it’s very rare we invest any clients’ money in these strategies.”
For 9%, the challenge lies closer to home, with paraplanners selecting lack of internal training or confidence.
One respondent said plainly: “Lack of training is the biggest drawback.”
Others hinted that it is difficult to build expertise when clients rarely request ESG solutions in the first place.
The introduction of the FCA’s Sustainability Disclosure Requirements and voluntary sustainability labels may also help reduce some of the confusion paraplanners highlighted.
The four labels – Sustainability Focus, Improvers, Impact and Mixed Goals, are designed to bring clearer definitions and more consistent standards to sustainable products, making comparisons easier and helping limit greenwashing.
We recently published an article on FCA examples of good and poor practice: Sustainability Disclosure Requirements labels: Good and poor practice – Professional Paraplanner
Each label must meet a robust, evidence‑based standard, which could support paraplanners who currently struggle with inconsistent ratings and uneven data between providers.
Not all paraplanners struggle, however. 16% reported that they do not face significant issues, and a small number described long‑standing familiarity with ESG investing.
One paraplanner highlighted more than a decade of experience in the space: “We have used ethical portfolios for over 12 years. We still have over 60% of clients invested in ESG or sustainable portfolios.”
Looking at the responses, the overall picture suggests paraplanners face challenges not solely because of client sentiment, but because the ESG research environment remains fragmented and inconsistent.
From uneven data and differing methodologies to product clarity and training gaps, ESG adds an extra layer of complexity to the recommendation process. For many paraplanners, it requires more work and, more scrutiny than traditional investment research.
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