Advisors’ use of funds focused on environmental, social and governance (ESG) factors is on the rise this year, with nearly four in 10 advisors (38%) indicating they’re currently using or recommending these funds in 2020. That’s up from 26% in 2018 and 2019, according to the 2020 Trends in Investing Survey by the Financial Planning Association, the Journal of Financial Planning and Janus Henderson.
The groups surveyed 242 financial advisors, 79% of which hold the CFP designation. More than half of respondents (54%) said they work as an independent investment advisor rep or RIA.
The survey found that nearly one-third (29%) of advisors plan to increase their use and recommendation of ESG funds over the next 12 months, up from 19% in 2019, and about 40% said that clients have asked about investing in such funds in the past six months.
Funds focused on ESG were resilient during the coronavirus market sell-off—even as the overall fund universe saw massive outflows.
According to WealthManagement.com’s annual survey, financial advisors are becoming more interested in sustainable investments, though concerns over performance sacrifice linger. Seven in 10 (70%) advisors who don’t offer the strategies said they would if a case could be made that performance would not suffer because of it.
