Time for a conversation about sustainability with your clients?

From ’Extinction Rebellion’ to ‘The Blue Planet’ and the ‘Plastic Pledge’ we are surrounded by a global focus on our future. This is no longer confined to the younger generation. By Gillian Hepburn

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A survey conducted by Schroders[1] indicated that the percentage of people who will always consider sustainability factors when selecting an investment product is now higher for Generation X[2] than millennials.

In the next few years, legislation currently making its way through the EU parliament will compel financial advisers to discuss sustainable investing and preferences with their clients. However many feel on unfamiliar territory.

You might like to look at this video which covers the following three points for financial advisers to consider:

1. Don’t wait for regulation

A range of measures from Brussels indicate that all financial institutions are expected to play their part in encouraging investment into sustainable investments.

Whilst legislation is still being finalised and may not come into force until 2021, demand for sustainable investments means that advisers will increasingly need to have conversations with clients. Despite what may happen as a result of Brexit, we also have to assume that European legislation will continue to be implemented over the next few years in the UK.

2. Be informed

Many financial advisers and clients are rightly confused by the terminology being used for sustainability and how this translates into the investment solutions available. It’s therefore a good time to get educated in order to support client conversations.

Whilst, legislation designed to ensure a consistent approach to terminology is also in progress,  it’s still some way off.

However, financial advisers should use all the various resources available from providers. Those offering ESG and sustainable investment solutions will typically have articles on their websites and many offer ‘face to face’ support. This guide on the ‘50 Terms every sustainable investor should understand’ might be a helpful starting point.   

3. Review your Centralised Investment Proposition (CIP)

It’s never to early to start to review your CIP and ensure that you have a range of solutions available for clients who want to put their investments to good use. Depending on the required client outcome, you may require a range of funds, model portfolios on a platform or the option of a bespoke portfolio available from a Discretionary Fund Manager. For example, if a private client, trust or charity has very specific screening requirements for their investment, a bespoke solution may be

the answer. Alternatively for those wanting to address climate change and sustainability, perhaps a fund or model portfolio designed to support these requirements should be available.   

In summary, this subject and rising client interest is not going away so don’t wait on legislation before taking action!

[1] Schroders Global Investment Survey, 2019

[2] Those born between early 1960s to late 1970s 


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