An FCA-established working group, known as the advisers’ Sustainability Group, has released a new report urging financial advisers to ask every client about their sustainability and ESG investment preferences as part of their routine fact-finding process.
The industry-led group, which brings together advisers, wealth managers, and responsible investment specialists and experts, launched the report this week in which it set out practical guidance for advice firms looking to build sustainability into their processes.
The report argues that sustainability should be treated as a mainstream part of financial advice, rather than a conversation reserved for clients who specifically identify as “ethical” investors, and, among its key recommendations, says advice professionals should treat material sustainability risks as financial risks that may affect clients’ long-term financial plans.
Dan Godfrey, chair of the group, said in the report: “When advisers get sustainability right, they do more than comply with regulation – they are aiming to protect portfolios… and unlock new commercial opportunities.
“Clients are increasingly conscious of sustainability risks and many want their investments to reflect their values. Advisers who can have informed, confident conversations about climate, nature, social issues and stewardship will differentiate themselves.
"It will help them to build trust and long-term loyalty with clients who value proactive, thoughtful advice."
The guide is free to read on the PIMFA website.
