Posted on 28th October 2009
High-net-worth individuals are becoming increasingly aware of social, environmental and governance issues and how they relate to their investments, according to a report from responsible investment specialist EIRiS and private bank Kleinwort Benson.
Now in its third year, the report, Responsible Investment and Wealth Management Opportunities for the Future, was based on a survey of the global readership of wealth management newswire WealthBriefing. It found that 70% of wealth managers' clients see a clear link between their philanthropic activity and investing in line with their altruistic goals.
The report also cites the 588 signatories to the UN Principles for Responsible Investment initiative, representing funds under management of around $18 trn (£11 trn), as evidence of this increased demand.
The wealth management industry is responding positively. For example, the report found that 55% of wealth managers are more likely this year to look at governance and impending regulatory issues in their clients' portfolios.
Guy McGlashan, head of private wealth management services at Kleinwort Benson, said, “The financial landscape has changed immensely since the demise of Lehman and we have a responsibility as wealth managers to understand not only a client's investment outlook but also their philanthropic drivers.”
The financial crisis has also had a positive effect on the view that wealth managers take towards responsible investment, making 30% of respondents more likely to offer it to their clients. However, a lack of clarity and information on performance were cited as key barriers to implementing bespoke responsible investment solutions.
90% of respondents said their responsible investment portfolios had performed the same or better than their other portfolios.
Victoria Woodbridge, senior client relationship manager at EIRiS, said, “Wealth managers can improve retention rates and gain a competitive advantage by responding to the increasing numbers of HNW individuals who are expressing an interest in responsible investment.”
The full report is available for £195 from WealthBriefing by contacting Philip Harris, on +44 (0) 207 610 8104 or email philip.harris@clearviewpublishing.com.
