Why Financial Advisors Are Still Reluctant to Jump on ESG Bandwagon

Friday, August 18, 2017

A wave of mutual funds and ETFs with socially responsible investing themes keep coming to market. By investment researcher Morningstar’s latest count, 200-plus mutual funds and ETFs are now available featuring some sort of “sustainable” investment strategy.

Asset managers and major brokerages think there’s big money to be made shilling these funds to advisors, with the likes of BlackRockBank of America and UBS highlighting the growing acceptance and mainstream popularity of SRI and “impact investing” strategies.

But many advisors don’t seem to be biting. A survey of advisors from the Financial Times’ list of top RIAs last year showed just 4% of firms were focused on SRI opportunities.

Likewise, data compiled by Morningstar show funds following a sustainable investing theme had nearly $76 billion in net assets through last week. That represents just 0.45% of the total U.S.-based mutual funds and ETF market, according to the independent Chicago-based research firm.

Source: Financial Advisor IQ (link opens in a new window)

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