Dramatic Increase In Focus On ESG Investing Wealth Managers And Financial Advisors Say

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  • Nearly all (98%) wealth managers and financial advisors say clients are increasing their focus on ESG credentials in their investment portfolios.
  • But 95% say there must be more investment in technology and systems to help them improve their understanding of the ESG and climate risk factors.

Increase In Focus On ESG Investing

Environmental, social and governance (ESG) issues are at the forefront of investors’ considerations when looking at their portfolios, according to 98% of wealth managers, portfolio managers, financial advisors and financial planners who have seen slight (73% of survey respondents) or dramatic (25%) increases in clients scrutinizing their sustainability investment credentials.  This is according to new global research* from Ortec Finance, the leading global provider of risk and return management solutions for professional investors.

The global study among wealth managers and financial advisors whose organizations collectively manage approximately $750 billion, found the attention to ESG factors will intensify over the next 24 months with 80% of respondents expecting slight increases in client focus; 15% predicting dramatic increases; while 5% say the focus will stay the same.

When looking at climate change specifically, more than a third (36%) of wealth managers and financial advisors say they have seen a dramatic increase in client focus, while 62% have seen a slight increase. Just 2% have seen no change.

The research also reveals that 96% of wealth managers and advisors say investors are avoiding companies that have a harmful impact on the environment or that contribute to climate change.

While respondents show high levels of confidence in the existing systems and tools they use to review the ESG and climate risks of the funds and stocks that make up their clients’ portfolios, nearly all (95%) agree that the wealth management/portfolio management industry needs to invest heavily in new technology to help improve their understanding of those risks.

Averting A Climate Crisis

Ronald Janssen, Managing Director Goals-Based Planning at Ortec Finance said: “Private investment is critical to ensuring the world is able to meet its commitment to net zero carbon emissions by 2050 and avert a climate crisis. It is encouraging that so many investors are increasing their focus on ESG issues and actively avoiding companies that contribute to climate change.

But advisors need the right technology and systems if they are to fully support their clients in investing for good. Ortec Finance has long been supporting the industry with scalable solutions with the Goals-Based Investing approach that enable them to manage clients’ investments more efficiently and deliver more value to those clients, particularly on ESG issues.”

Ortec Finance provides wealth managers and financial advisors with scalable solutions that enable them to manage clients more efficiently and deliver more value to those clients. Its OPAL Planning tool supports banks, advisors and wealth management firms to translate client’s financial goals into an optimal investment strategy – providing forward-looking insights into whether clients are on-track regarding their investment objectives.

Together with a fully integrated cash flow planning tool for a holistic view of the client situation, the OPAL Planning tool addresses both income and investment risk. Find out more: https://www.ortecfinance.com/en/insights/product/opal

About Ortec Finance

Ortec Finance is the leading provider of technology and solutions for risk and return management. It is Ortec Finance’s purpose to enable people to manage the complexity of investment decisions.