LUXEMBOURG, LU — In less than 250 days MiFID and sustainability regulations will require European financial advisors to discuss sustainability preferences with their clients. A new Nordea Asset Management (NAM) survey found that despite 71% of investors planning to increase their ESG allocation over the next year, 62% have not received an ESG proposal from their financial advisor in the past 12 months.
NAM gathered the views of 1200 European individual investors from Germany, Spain, Italy, France and Switzerland. All survey participants currently use a financial advisor. The findings suggest that many financial advisors have not yet fully embraced the ESG opportunity in the context of the upcoming regulation.
European investors reported that they recognize sustainability as a financial risk and would like to see their financial advisors offer more ESG products. They also said their lack of knowledge is a significant hurdle to investing in ESG products—they need clearer and simpler explanations of ESG products.
- Advisors should up their game to be ready for MiFID and sustainability regulations
– 39% of clients surveyed identified a lack of knowledge and experience as the greatest hurdle to ESG investing
– 81% of clients say they need clearer and simpler explanations of ESG products
– 73% want advisors to offer them more new ESG products
- Advisors play a crucial role, yet have only partially kept pace with coming regulations
– 73% identified their advisor as the main source of ESG information
– 96% of investors trust that advisors know about ESG
– 62% have not received an ESG proposal from their advisor in the past 12 months. With MiFID coming into force next year, this is a major opportunity for advisors to grab.
- Retail investors confirm their appetite for more ESG products
– 76% have increased their ESG investment in the past 12 months
– 72% are satisfied with the performance of their ESG investment
– 71% plan to increase their ESG allocation over the next 12 months
“Nearly three-quarters of retail investors surveyed ranked their financial adviser as the main source of ESG information. This represents a real opportunity for financial advisors,” says Francois Passant, ESG Leader at Nordea Asset Management. “To seize it, the survey reveals that they need to enhance their ESG knowledge and the way they explain ESG essentials and products to their clients. This is where partnering with asset management firms that can demonstrate longstanding ESG experience as well as ESG, product and support capabilities can make a real difference”.