This time, in a post-RDR and Mifid world, there is no commission to lose and no real additional work to undertake. As we enter a probable lower returns environment, sustainability provides an opportunity to talk to your clients about something other than past performance to demonstrate your value.
There is still a habit of selecting solutions based on past performance. If you recommend a solution because of its performance ranking or measurement today, is that more or less likely to still be true at the next annual review than its sustainability or ESG ranking or measurement?
I am fairly sure that the sustainability or ESG result is more likely to still be true. There is no reason to let the idea that these things will change over time stop you from considering them now, particularly when you review the suitability at least once in every 12 months
Yes, of course we can see people jumping on the bandwagon. Yes, this subject is a sales and marketer’s dream. Yes I am trying to sell you my system. Why should that stop you? The weight of capital is moving and that can only be a good thing.
I cannot imagine that we will over invest in solar and use up the sun’s energy, or invest in nuclear fission and destroy the world, or hydrogen in the gas mains and blow up your street.
Quite frankly, if we do, then a complaint that the ‘sustainable’ solution turned out not to be sustainable would be the least of your problems.
I know how uncomfortable it feels not to be an expert in a particular investment factor and not know what to do. Many of us are playing catch up and looking for simple, sensible solutions.
At Dynamic Planner, we’ve produced a guide to help advisers explain it all to clients, alongside a psychometric questionnaire to understand your client’s sustainability preferences, built MSCI ESG manufacturer’s information into our system to make it easy.
We have even structured our system around PROD so that you can research sustainable solutions for the relevant target market and legitimately reuse that work for those individuals.
At the risk of jumping on another bandwagon, I’ve likened us to Q at MI5. The tools and gadgets are available now. All you have to do, Mr Bond, is to use them, go and save the world, and look good doing it.
Chris Jones is proposition director for Dynamic Planner
