New client profiler tool reveals just 12% of advised clients are ‘ESG Dedicated’
Data from Quilter’s new client profiler tool, launched in March 2022, reveals that just 12% of clients are ‘ESG Dedicated’, showing that there has been an even split between those who are ‘ESG Focused’ and those who are ‘ESG Aware’.
Data from Quilter’s new client profiler tool, launched in March 2022, reveals that just 12% of clients are ‘ESG Dedicated’ (meaning they want ESG factors to be a major influence on how their portfolio is managed).
Meanwhile there has been an even split between those who are ‘ESG Focused’ and ‘ESG Aware’. ESG Focused means the client knows what responsible investment means and will take ESG factors into account when selecting a portfolio, whereas ‘ESG Aware’ clients are simply made aware of the ESG rating of their portfolio.
Overall, 56% of clients are either ESG Dedicated or Focused, meaning more than half want ESG factors to play a role – to some extent – in how their portfolio is selected or managed.
|Category||No. of clients|
|ESG Aware||917 (44%)|
|ESG Focused||920 (44%)|
|ESG Dedicated||252 (12%)|
Source: Quilter March-June 2022 data.
Quilter’s new tool was launched to support the expanded WealthSelect Managed Portfolio Service which added Responsible and Sustainable portfolios to the range as part of a wave of enhancements in March 2022.
The client profiling tool was developed in collaboration psychometrics experts at Dynamic Planner and is available to all advisers and clients who use the Quilter platform. It assesses client needs across four dimensions – risk, investment goal, investment management style and ESG preference.
Five tips to approach the responsible investment conversation with clients
Raise the topic in the right way and at the right time
Many people will have deeply personal views about the issues underlying responsible investing and failure to bring the topic up correctly risks an emotionally charged discussion. It is therefore best to broach the topic when you have built trust in the relationship, and clients have the context of their financial circumstances.
Don’t project guilt onto the client
Frame the conversation around how people are starting to alter their lifestyles and how this can be translated into investing. The best way to open the conversation is by raising the unraised objection such as: ‘at the risk of you having too many things to think about, there is just one more aspect I’d like to raise with you.’
Don’t base the decision on perceived negative or positive returns
Some clients believe responsible investing means foregoing investment returns. Others think investing responsibly makes higher returns more likely. Unfortunately, over any given time period either could be the case, but it’s impossible to predict.
Don’t get bogged down in the detail
With too much choice, people tend to freeze and avoid taking decisions. Advisers must educate but not over-complicate. People are more likely to relax if they understand that other people they identify with are in the same position and feel the same way.
Empathise with the client’s stance
Empathising with a client’s stance can reduce misunderstanding and guilt. Ensure the client goes with solutions they feel most comfortable with and will stick to over the long term.