Young Advisors Want More Social Impact Fixed Income Products: Survey

Social impact investing is a major instrument for advisors with three to nine years tenure, found a new study from Incapital, an underwriter and distributor of securities.

However, most believe there is a dearth of ESG fixed income products available. In fact, 58% of those with three to nine years of tenure believed there were too many equity ESG products and not enough fixed income options. In contrast, 34% of advisors with more than 10 years of tenure agreed.

Of all advisors surveyed, 44% use actively managed equity mutual funds to achieve social impact goals, 35% use individual stocks, and 31% use equity ETFs. Despite the lopsidedness of equity ESG products, 30% stated they used fixed income actively managed mutual funds, 29% used bonds and 22% used ETFs to achieve social impact goals.

Indeed, almost all (99%) of the younger generation of advisors surveyed use individual bonds to discuss social impact goals with clients, which is almost 25% more than advisors with more than 10 years of tenure, according to the survey findings.

“This [younger] generation has more access to information on social impact investing than any before them, so it is no surprise that millennials and the generation of advisors that serve them, are like-minded in their support of results-driven causes,” said Louise M. Herrle, Incapital managing director, in a statement.

The online survey of 200 financial advisors was conducted from Sept. 20 to Oct. 1, 2018, by Q8 Research LLC.

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