Recently, a report has landed in our inbox that distracted the interest of asset allocationrs.
Schroders and the Impact Investing Institute have joined forces in several researches to request wealth managers to embrace the benefits of Impact Investing.
They wrote:
“Wealth managers are missing out on long-term commercial opportunities to support their future businesses.”
and:
“Beyond sustainable and responsible investment, “Impact” means providing investment products, solutions and strategies that intentionally provide positive and measurable social and environmental impacts, along with financial return ratios. ”
They also argue that impact investment can give businesses meaningful ways to distinguish themselves in an increasingly homogenous market.
Let it slow for just one minute. It is debate as to whether the industry is progressing beyond sustainable and responsible investment.
As we’ve covered recently, SDR proves yet another hurdle for an already broken industry. Not long ago, we reported that city’s asset management had closed the scope of its sustainable model portfolio due to concerns surrounding the FCA’s labeling regime.
The uncertainty surrounding labeling further hinders growth from a product development perspective by wealth managers.
“SDR certainly raises bars, but for the time being, the focus is on asset managers getting existing funds on the line and is not aware of the recent launches of new funds in this sector.”
In fact, Prime Minister Mitten launched the MPS series last August and said it was “impossible” to consider launching in the context of SDR implementations, as there is no sustainable portfolio.
Perhaps even more worrying, Platforum’s latest study shows that four-fifths of the advisors surveyed estimated the percentage of client assets in their sustainable portfolio to be between 0 and 20%.
“In other words, the proportion of advice clients with sustainable portfolios has decreased,” they said.
In fact, many portfolio managers are running some kind of ESG service because they feel it is necessary to access the platform.
Therefore, the demand for simple sustainable products now seems to be particularly soft. We conclude that an impact investment revolution among wealth managers is unlikely to happen anytime soon.
