The RI Opportunity for Advisors

In 2023, 65% of surveyed Canadian investors expressed interest in responsible investment (RI), and two-thirds of respondents (67%) would like their financial services provider to inform them about RI options that are aligned with their values. However, only one third of those surveyed reported that their advisors are initiating discussions around RI, indicating a significant service gap. Year after year this service gap persists, leaving a full third of investors eager to speak to a financial service provider about responsible investing. With such clear client demand, why are so many financial advisors sitting on the sidelines of responsible investment?

The RIA’s 2024 Advisor RI Insights Study set out to find out. Here are some of the key findings:

– Reasons not to offer RI centre around a lack of knowledge and resources, or a perceived administration burden. Product availability is not a barrier.

– Advisors’ education and knowledge of RI are tightly linked to their overall use of RI. The more confident they are about RI, the more extensively they will use it in their practice.

– Advisors rely on investment companies – especially wholesalers – for information, and will likely turn to them with questions when introducing or increasing their RI usage.

– Investor demand is driving advisor adoption.

– Nearly 90% of RI users anticipate the growth of RI over the coming years, and non-users are open to using RI.

This means that financial advisors who learn to engage clients on ESG topics and RI strategies stand to gain tremendously.

Client and Advisor Fulfillment Gaps

Source: 2024 Advisor RI Insights Study – Topline Report

How can we drive greater adoption of RI at the retail level? It will take a 360-degree approach, from advisors informing themselves and servicing their clients based on needs and priorities, to fund manufacturers and wholesalers providing the needed support.

It is clear that the more RI knowledge an advisor has, the better positioned they are to serve their clients’ ESG-related needs and narrow the RI service gap. These recordings from the 2024 Advisor RI Bootcamp present an excellent jumping off point for anyone looking to learn about leading responsible investment products from the portfolio managers and analysts behind them.

And if you would like to learn more about RI assets and trends in Canada, be sure check out the virtual launch of the 2024 Canadian RI Trends Report on November 19^th.

The opportunity is there – but it is incumbent on all of us to play our part in closing the RI service gap.

For more information about the 2024 Advisor RI Insights Study, contact Kristen Sheppard at kristen@riacanada.ca

Author

RIA Staff

Responsible Investment Association

The Responsible Investment Association (RIA) is Canada’s industry association for responsible investment. RIA Members include asset managers, asset owners, advisors, and service providers who support our mandate of promoting responsible investment in Canada’s retail and institutional markets.