Frank Potaczek, Head of UK Proposition at Architas, gives his thoughts on the Professional Adviser survey into sustainable investing and discusses how advisers can respond to the increased interest in this area.
Do you think advisers and their clients are enthusiastic about sustainable investing?
If you'd asked me as little as 12 months ago, I might have said it's only for niche clients. But a change has come, particularly over the past 12 months, not because of the hype that you see in the trade press but because everyone is talking about sustainable investing: look at single-use straws, plastic cups, the BBC's Blue Planet and plastics in the ocean, VW emissions scandals - and now Greta Thunberg presenting to a multi-party parliamentary meeting and becoming Time's Person of the Year."
90% of respondents said either that they had no questions from clients on ESG or under 10% of their clients were asking questions. Is this disappointing?
It underlines the need for education, not only for consumers but for advisers. The term ESG is something that's come from the institutional investment industry. If I went to my kids' school and said, "Are you interested in ESG?" they'll say, "What are you talking about?" If I said, "Are you interested in sustainable investing?" then you get, "Okay, tell me more." So, I'm not disappointed: I would welcome more education and for the industry to understand the importance of the language that we use.
Around 62% of advisers now think investors aged 40-60 are moderately interested in ESG. Does this show that ESG isn't just a concern of younger generations?
I would go beyond that. My mother is widowed but retired and wants to invest money for her grandchildren. Not an awful lot but she wants to make sure there is a sustainable world for her grandchildren to inherit. That's why the whole nuance of "the millennial" has been changed towards "millennial values". My mother has millennial values. Remember that when Fair Trade was introduced back in the early 1980s, it was just for the fringe. Now, it is front and centre.
To find out more about sustainable investing, click here to read Architas and Professional Adviser's guide, ‘The Value of Values'
