Environmental, social and governance (ESG) investing is one of the biggest areas in the institutional space and it could finally become a huge part of the financial advice market this year.
Colin Dyer, head of proposition and private client management at 1825, said to International Adviser: “ESG is definitely gathering a lot of momentum and that’s a real opportunity for the advice industry to put positive pressure on companies to take sustainability seriously.
“We are definitely seeing a noticeable increase in the number of clients who are asking us for capabilities in this area and I think that will accelerate exponentially over the next few years.”
Climate change has been on everyone’s radar for many years, “but it feels as if public awareness of it is through the roof”, Dyer added.
“On the back of that, people have got an increasing interest in how they are investing their wealth.
“As money moves across the generations, I think that again will drive a big interest in ESG-style investments.”
Enough on the market
In a bid to cope with demand, CFA UK unveiled the first ESG “qualification of its kind” in the country in November 2019.
Also, in the same month, Scotland-based IFA firm Cornerstone Asset Management launched an ESG-driven responsible futures portfolio range in partnership with Canaccord Genuity Wealth Management.
But are there enough products in the retail space?
“I suspect there is now enough being developed that is not in the marketplace yet, but I think there is a lot that is coming down the conveyor belt,” Dyer told IA.
“I suspect by the time we get to end of this year, there will be many good offerings.”
Any more deals?
It may be a big year for ESG, but will it be for 1825?
Standard Life’s financial planning arm was very active in 2019, especially in the M&A space, where it completed eight deals.
This included acquiring the UK-wide wealth advisory unit of accountancy firm Grant Thornton.
So, what about 2020?
“We will definitely have a core focus on consolidating the acquisitions we have done so far and focusing on really pulling all of the businesses together,” Dyer said.
“We have got a strategy for future growth and we will continue to look opportunities that come up.”
