ESG in the spotlight

Green is the colour this week with news that Defaqto has launched dedicated ESG reviews via its Defaqto Engage financial planning software, providing financial advisers with a simple way to assess both funds and discretionary fund managers (DFMs) from an ESG perspective. 

Defaqto's reviews, which are created by a dedicated team in conjunction with asset manager interviews, provide a range of insights, including: how well a fund or DFM aligns to its ESG policy; adherence to UN sustainable development goals; and whether there is any involvement in 'controversial' sectors or investments.

B Corp wealth manager EQ Investors meanwhile, has confirmed its ESG credentials this week with news that it received 'straight As' in its latest UN-backed Principles for Responsible Investment (UN PRI) assessment. The company was awarded an A rating in both the Strategy & Governance, and Listed Equity categories.

And staying with green investments, we also have news of a new open-end fund from Tortoise Capital Advisors – the Ecofin Global Renewables Infrastructure Fund – which has a AAA MSCI ESG rating and employs sn investment strategy focused on 'the rapidly growing migration into renewable and related clean electricity infrastructure'.

“Universally, we believe investors are materially underweight climate change and renewables, including the technology driving renewable adoption," says Brent Newcomb, President of Ecofin, which was acquired by Tortoise in 2018.

Coronvirus-related news and research is never far away, and this week is no exception with a report on a paper from independent analysts AKG, co-sponsored by wealth manager Charles Stanley, looking at how advisers need to get 'creative' if they want to win new business. Advisers though are optimistic about the future and see a positive outlook for engagement, with 52 per cent believing Covid-19 will increase demand for financial advice from existing customers, while 48 per cent are of the view it will increase demand from new customers.

Another impact of the pandemic has been an increase in 'day trading', according to Cerulli Associates, especially among younger investors with extra time on their hands while either on furlough or working from home. And smart advisers should use this trend to try and strengthen client relationships. "By understanding the size and objectives of a client’s personal trading account, the adviser can help set budgets and ground rules to help their clients make optimal choices on their own," says Cerulli.

For Brits planning to retire abroad though, its Brexit rather than coronavirus concerns that are front of mind. New research from Canada Life reveals that almost half of over 50s who are planning to wave bye-bye to Blighty in search of a new life overseas are reconsidering where to set up their retirement homes because of Brexit, while 44 per cent are considering ditching their plans altogether.

"With Covid-19 dominating the global news agenda this year and a second wave anticipated, it’s surprising that Brexit concerns come out on top and could indicate that longer term legislative fears are greater than shorter-term health and safety for soon-to-be retirees," says Andrew Tully, Technical Director at Canada Life.

Wealth Adviser

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