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IFAs still don’t understand responsible investing

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A survey of 400 global IFAs has revealed that many fail to even discuss responsible investment with their clients.

Research by Alquity has found that over a third (38 per cent) of IFAs said they had never discussed responsible investing with clients whilst almost a third (31 per cent) of IFAs admit they don’t know enough about it. In addition to this a staggering two thirds (66 per cent) of those polled said they lack access to information on it.
 
However, when asked about the future, 82 per cent think the market for responsible investment products will increase over the next 5 years. The size and growth of sustainable investing in Europe represents 64 per cent of the EUR19.3 trillion global market for sustainable investments in 2014, with the UK representing the largest market with a volume of EUR1.97 trillion.
 
Many IFAs confirmed that the decision to invest responsibly is driven either entirely or mostly, by their clients and in only 5 per cent of cases is it based on the recommendation of the IFA. Alongside the lack of available information around responsible investing, 32 per cent of IFAs stated that they believe there are insufficient funds to choose from. 
 
Paul Robinson (pictured), founder of Alquity, says: “IFAs still don’t understand responsible investment and there is a critical disconnect between the demands of retail investors who are looking at ethical investments and the traditional IFAs. IFAs need to wake up to the benefits of using ESG to drive investment performance and mitigate risks, before they miss opportunities for their clients and become dinosaurs in a world that is embracing responsible investing.
 
“Alquity is also calling on more to be done by the asset management industry to provide clear and professional information regarding responsible investment. The onus is on our industry to communicate better and reach out to rather than lecture IFAs.”

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