(Finance) – In three years, ESG products will represent about half of the portfolios held by the Financial Advisory Networks. The same ones provide the estimate manager of the companies associated with Assoreti, the Association of Investment Consulting Companies that with McKinsey, unveiled the financial advisory industry’s plans for sustainability. The sustainable investingwhich is now among the top three objectives of the strategic agenda of the Italian financial advisory market, in 2025 will therefore have doubled its weight in the portfolios of network customers compared to the current 15-20%.
“Winning business models for ESG networks of financial advisors”, is the title of the analysis presented today on the occasion of theevent promoted by Assoreti for the Salone del Risparmio, “Role and value of financial advice in the sustainable transition”. In addition to the Networks – involved with interviews with top management, questionnaires and focus groups – the research also analyzed the dynamics of customer behavior, more than a thousand, between private and affluent, in relation to investments and financial advice in the ESG field.
“We expect an important growth of the ESG masses managed by the Networks. Almost all the operators – he commented Cristina Catania, Senior Partner McKinsey – are carrying out various initiatives to encourage the penetration of ESG investment products into their portfolios and raise investor awareness on sustainability issues. Furthermore, the survey showed that since the beginning of 2022 ESG interest has increased for the majority of customers and for over 70% of the wealthiest ones “.
Sustainable investment is therefore destined not only to remain but also to grow. In fact, the first months of the year saw an increase in interest in sustainable products by Italian investors: above all High Net Worth and Private customers, but also Affuents. The priorities expressed by the Networks lie in this direction, aiming, in the coming years, at a further specialization in the ESG field in the selection of sustainable products, currently achieved mainly through compliance with articles 8 and 9 of the European regulation on sustainability of financial services (Sustainable Finance Disclosure Regulation) and with the sustainability ratings of third-party companies. To date, 40% of the Networks have activated ESG-themed partnerships with specialized Asset Managers and 25% have already adopted proprietary sustainability ratings, with the aim of developing increasingly specialized skills with a team dedicated to the selection of ESG compliant products ( today 22% already have one).
The research also highlights the role of regulation as a lever to encourage ESG issues in the financial advisory industry, with the inclusion in the adequacy questionnaire of customers’ sustainability preferences from next August. 44% of the networks associated with Assoreti are already aligned and 20% have activated specific tools to analyze the information provided. In the coming months, 67% of the industry’s compliance with the new MiFID II obligations will reflect the standard set by the regulatory requirements and for 33% it will also include supplementary questions to get to know their customers better.
“The new measures, the application of which is scheduled for next August 2, – underlines the Consob commissioner, Chiara Mosca commenting on the research results – will allow consultants to gain insight into customers’ sustainability preferences. The integration of ESG issues in financial consultancy represents an opportunity to develop business models in the ESG field that are even more oriented towards pursuing the best interests of customers; but it is also a new challenge for the industry because the ability of consultants to explain the implications of sustainability to clients will be enhanced so that investment decisions are informed and aligned with these preferences “.
There training it also represents one of the key factors for developing the integration of ESG issues in the consultancy model: 90% of the Networks have in fact initiated ESG courses complementary to the mandatory ones (56% with internal courses, 33% mixed). A specialization that the industry is aiming for and that goes hand in hand with digitization which, at the service of consultants, will be one of the success factors for managing the complexity of the analyzes and reducing the risk of compliance of profiling models. 86% of the Networks have already made available to consultants dedicated tools that include training activities (57%), digital platforms (43%) and tools for assessing the regulatory compliance of products (29%).
“We have seen and continue to see a strong push from financial advisors to guide households towards quality managed savings. Quality that – he declared Paola Pietrafesa, CEO of Allianz Bank FA, representing Assoreti – is supported by continuous training and specialization where the role of the financial advisor, his professionalism combined with the ability to build trust relationships, are and will be even more decisive in converting liquidity into sustainable investments. A skill that the system has already demonstrated by keeping liquidity below 15%, a decidedly low value compared to the market trend “.
“The operators of the sector – he affirmed Marco Tofanelli, general secretary of Assoreti – are aware of this issue and are moving on a more sustainable trajectory. It is a complex path, still uncertain in the finish line, but there is no doubt that it is the path of the future. The industry has always had the sensitivity and ability to anticipate the times and this study highlights this. As an Association, already three years ago, we decided to update the Code of Conduct, emphasizing sustainability and generational change and we are doing a lot to provide those who will lead this change with the necessary tools so that the profession is always in step with the times. “.
Technology and specialization are the levers shared by the industry for an ever deeper knowledge of customer behavior. In fact, the Consulting Networks claim that today 50% of customers would be willing to pay higher costs for an ESG product, given the medium-high interest in the topic declared by 83% of the customers interviewed, who assess a greater propensity to invest in products with a positive impact on the environment (57%) and on society (52%).
“The relevance of ESG issues is constantly growing. Training is fundamental both for networks of financial advisors and for students who intend to undertake this path: students’ awareness of the evolution of sustainable finance feeds the new networks of consultants of the future – he commented Francesca Gostinelli, head of Enel’s Group Strategy, Economics and Scenario Planning -. Knowing how to understand the 360 ° integration of sustainability in the strategies of companies in each sector and in the daily actions, in the projects that are carried out, in the metrics that from objectives become things done, is a fundamental lever for orienting capital capacity towards sustainable investments ” .