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Fidelity Launches ESG Tech Solution for Advisors

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Fidelity Investments has just launched an open architecture technology solution to help RIAs engage with clients about environmental, social and governance investing and create ESG-focused portfolios.

The product, known as ESG Pro, “gives advisors everything they need to get started with ESG in one streamlined solution,” said Rick Smyers, managing director at Fidelity Labs, the firm’s internal fintech incubator, in a statement. “It provides advisors with tools to deepen their relationships with existing clients — and engage prospective clients — by developing sophisticated investment strategies that align with clients’ distinct values.”

Smyers explained to ThinkAdvisor that Fidelity saw lots of data “about the vast majority of end clients interested in ESG … and plenty of product out there [but] advisors hesitant to get involved. Advisors are the missing link.

“We think the industry is at an inflection point,” added Smyers. “We’re hoping that tools like ESG Pro will help make it [ESG] more mainstream. If you make it easy, it will grow.”

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ESG Pro has two components: the client engagement side, which helps advisors discuss ESG investing with clients, and the portfolio side, which helps advisors create ESG portfolios and compare current portfolios to ESG models and more.

The client engagement capability starts with a “Values Discovery Quiz,” a white-labeled client questionnaire to help advisors get a better understanding of their clients’ thinking about ESG factors. It also also includes customized white-labeled client reports that show how a client’s ESG portfolio performs according to 24 ESG characteristics, including carbon footprints, labor controversies and weapons, compared to a traditional portfolio. 

The portfolio component offers many capabilities: active and passive preloaded ESG models  from a variety of asset managers, ESG data and financial characteristics to help advisors align their investing strategy with clients’ values, and research on thousands of mutual funds and ETFs, including over 100 ESG funds and ETFs.

Advisors can use the data, which is based on MSCI ratings, to study a client’s current portfolio and compare it to an ESG model, build an ESG portfolio or tweak an existing one. The cost is $199 a month per advisor.