Wealth advisers lose business and clients over lack of net zero commitment

Wealth advisers face losing clients over a perceived lack of focus and commitment on net zero and ESG investing, according to research from behavioural finance experts Oxford Risk, shared with Net Zero Investor.

Nearly two out of out of three retail investors questioned said they have or would consider moving investments to new advisers because they are unhappy about the ESG focus from their wealth managers.

Around one in five say they have already done so or intend to do so while another 43% say they would move if they were unhappy about net zero commitments and focus at their wealth adviser.

Oxford Risk’s study found one in three of clients rate their current adviser’s commitment to ESG highly or very highly.

However, just 7% say their adviser’s ESG focus is poor or very poor with 62% neutral about the ESG commitment.

Clients

Clients are however demonstrating their commitment to ESG – around 40% have moved some of their investments including pension pots into ESG funds over the past year and 61% of clients ensure at least some of their investments are ESG-friendly.

Greg B Davies, PhD, Head of Behavioural Finance, Oxford Risk said: “Advisers who do not demonstrate a commitment to and focus on ESG investing will lose clients, and investors are ready to move money to new advisers if they are unhappy.

“In particular, deployment of cash into new investments will greatly favour strong ESG propositions.”

“The role of technology in the hands of investment providers and advisers is crucial to grasping the opportunities and meeting the responsibilities of matching socially-minded investors to suitable ESG investments,” Davies concluded.