How Advisors Select ESG/SRI Products

The research below will be presented in a CE-eligible webinar on December 11, sponsored by Dimensional Funds. To register, go here.

LEXINGTON, MA. A large-scale survey of financial advisors has contradicted many of the long-held beliefs about ESG/SRI investing. The survey was conducted by Advisor Perspectives, a leading publisher of investment content for the financial services industry, as part of its research service.

The conventional wisdom is that the demand for ESG/SRI products is driven by the younger clients of advisors – particularly those in the “millennial” generation. But Advisor Perspectives’ research showed that the interest in ESG/SRI investing actually decreases with age, particularly among women.

Another key finding was that climate change is the “hot button” issue spurring interest in ESG/SRI products. Climate change was cited more than three times more often than the next most popular choice.

“Assets are flowing to ESG/SRI products,” said Robert Huebscher, the CEO of Advisor Perspectives, who noted that at least 150 new ESG/SRI funds and ETFs were introduced in 2018. “We performed this research to help our asset management clients understand the dynamics behind this trend.”

The research study had two primary goals: to understand how advisors select ESG/SRI products and what asset managers can do to influence those decisions. The responses were collected in September 2018 and Advisor Perspectives received 810 responses, approximately two-thirds of which were from RIAs or dual-registered advisors.