The latest developments in the ESG space.
A new study from behavioural finance experts Oxford Risk reveals that one in four European wealth managers are spending 40 minutes or less to establish the sustainability (ESG) preferences of new investment clients, in spite of agreeing that this is one of the most important tasks.
The study with wealth managers across Europe found that over half of respondents take between 41 and 60 minutes to establish the sustainability (ESG) preferences of individual clients. Around 13 per cent said they take between 61 and 90 minutes and 4 per cent spend more than 90 minutes, the survey reveals.
Around 90 per cent of European wealth managers also agreed that establishing sustainability preferences is one of the most important tasks when onboarding a new client, the research by Oxford Risk, which builds behavioural risk suitability software to help wealth managers support clients, shows.
The study found that too often these sustainability assessments and processes aren’t providing insightful or detailed enough information for basing future decisions on. Only one in four wealth managers said they were very confident at identifying the portion of a client’s investments that should be allocated to ESG investing after using their current processes. One in 10 were unsure whether they could identify what should be allocated to sustainable investing after the process.
Just around a third said they were very confident at being able to identify the portion of a portfolio that should be allocated to article 8 and article 9 funds under the EU’s Sustainable Financial Disclosure Regulation after using their current process. More than one in eight also did not know whether or not they would be able to do this using their current process.
The research was carried out on behalf of Oxford Risk by PureProfile who interviewed 210 wealth managers in France, Germany, Netherlands, Spain, Italy, Switzerland and the Nordics responsible for €3.2 trillion ($3.4 trillion) assets under management during July 2023.
Founded in 2002 by academics from Oxford University, Oxford Risk’s software supports wealth managers to assist their clients to make financial decisions in the face of complexity, uncertainty, and behavioural biases. Its behavioural tools assess financial personality and preferences as well as changes in investors’ financial situations and, supplemented with other behavioural information and demographics, in order to build a profile.