For UK financial advisers only, not approved for use by retail customers

New ESG research finds almost half of advisers say asset managers should be fined for greenwashing

• 46% of financial advisers think asset managers should face fines for greenwashing
• 40% say they are confused by the growing array of ESG regulations
• 41% reject the idea that all advisers should have ESG qualifications
• 32% say there is too much talk about ESG
• 28% are paying more attention to the S in ESG

Nearly half of advisers think asset managers should be fined for greenwashing while a third say there is too much hype around ESG, new research shows.

A CoreData Research survey of 300 UK financial advisers conducted in July found 46% agree that asset
managers should face fines for greenwashing. Just one in 10 (10%) disagree that managers should be
fined, while about four in 10 (43%) are undecided on the issue. Advisers focusing on HNW clients (48%)
are more inclined than their mass market focused peers (40%) t o think managers should face monetary
penalties for greenwashing.

The desire for a tougher set of rules for asset managers comes as advisers encounter increasing difficulty
navigating ESG regulations. Four in 10 (40%) say they are confused by the growing a rray of ESG
regulations. Levels of confusion are higher among independent advisers (44% vs. 27% restricted) and
those focusing on mass market clients (49% vs. 39% HNW).

But despite confusion over ESG regulations, some advisers are reluctant to equip themselves with
qualifications. More than four in 10 (41%) disagree that all advisers should have ESG qualifications. This
compares to just 25% who agree. Advisers focusing on mass market clients are more resistant — half
(50%) disagree advisers should have qualifications compared to 38% of their HNW -focused peers.

The study also shows advisers strongly disagree ESG is a temporary trend. Just 13% think ESG is an
investment bubble, while only 8% think ESG funds will perform poorly when the pandemic ends.
But while advisers dismiss the idea that ESG is a bubble, some feel there is excessive noise around the
space. A third (32%) say there is too much talk about ESG. This proport ion increases to nearly four in 10
mass market focused advisers (37% vs. 28% HNW). Independent advisers are also more inclined to think
there is too much talk about the subject (32% vs. 25% restricted).

Elsewhere, the research highlights a growing tendenc y among advisers to focus on the social component
of ESG. Nearly three in 10 (28%) agree they are now paying more attention to the S in ESG compared to
21% who disagree and 51% who are undecided.

“These findings suggest advisers want more ESG funds with a social purpose,” said Andrew Inwood,
founder and principal of CoreData. “This is likely a consequence of the pandemic which has seen social
factors such as human capital management take on more importance. For fund managers, the ability to
clearly explain how less quantifiable social performance targets will be met and monitored will be key.”

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