Only 38% of European wealth managers are up to speed on ESMA Mifid directives on sustainability assessments, a study from behavioural finance specialists Oxford Risk has revealed.
The study found that, despite European Securities and Markets Authority (ESMA) updating its guidelines on the integration of sustainability factors, risk and preferences into investment firms’ organisational requirements last September, 13% of wealth managers say that they don’t know what the directives on sustainability assessments are or are unsure that they understand them.
The research found that 30% strongly believe that the ESMA Mifid directive on sustainability assessments will improve investor outcomes. Over half (57%) said that they do believe that it will improve investor outcomes, and 11% are not sure whether it will or not.
It also revealed that just over a quarter (28%) of European wealth managers strongly believe that their current process for establishing a client’s sustainability is helpful to building their relationship.
Around 61% believe their processes are helpful but 11% are not sure whether their current process for establishing a client’s sustainability preferences are helpful to building their relationship or not.
Client insights
James Pereira-Stubbs, chief client officer at Oxford Risk, said: “It’s concerning just how many wealth managers still aren’t up to speed with Mifid II requirements, given that it’s nearly year since they came into force.
“The list of requirements may be long, with sustainability assessments making up just one part, but the key to understanding the solutions is simple. It’s all about client insights − better insights into a client’s sustainability preferences, better evidencing of these preferences and better presentation to clients of how these preferences match up with suitable investments for them.
“Get this right and you not only follow the spirit as well as the letter of the law, but also have more engaged clients, better asset growth and higher retention.”
