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Industry Spotlight > Advisors

Majority of Advisors Use ESG Products: Survey

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What You Need to Know

  • Sixty-one percent of survey participants use ESG products, including 67% of advisors under 40 and 71% of female advisors.
  • Wirehouse advisors are the most likely to use ESG products.
  • Sixty-two percent of financial advisors use SMAs, including 70% of advisors under 40.

A majority of financial advisors, citing direct interest from investors, use products focused on environmental, social and governance criteria, according to a survey released Monday by Broadridge Financial Solutions.

The survey also shows how the advisor-wholesaler relationship is evolving in the post-pandemic environment.

Sixty-one percent of survey participants use ESG products, including 67% of advisors under 40 and 71% of female advisors.

And 4 in 5 advisors who use ESG products say they plan to increase their usage over the next two years as investors actively seek out these products. 

The results showed that wirehouse advisors are the likeliest of all channels to use ESG products and to say both inclusion on their broker-dealer platform and promotion by their home offices are their reasons for doing so.

SMAs’ Popularity

The survey also found that 62% of financial advisors use separately managed accounts, with that number rising to 70% among advisors under 40. Fifty-six percent of advisors who use SMAs plan to increase their usage over the next two years. 

As advisors explore new investment vehicles, half of advisors are also using private funds, according to the survey. Eighty-one percent of respondents who said they use private funds also use SMAs.

“Now more than ever, investors are speaking up about the types of products they want to invest in, whether it be ESG, private markets or other emerging asset classes,” Matthew Schiffman, principal of distribution insight at Broadridge, said in a statement. 

“As advisors become more focused on providing the best client-centric experience and are optimistic about the year to come, they are looking to be equipped with the right tools and products to service their clients and investments. Asset managers are primed to step up and address the demand for these products.”

The survey was conducted online in January and February by 8 Acre Perspective among 400 financial advisors across wire, regional, IBD and RIA channels.

Advisor-Wholesaler Relationships

The Broadridge survey found that on average, advisors maintain 48% of their assets under management with their top five asset management firms. 

At the same time, 28% of advisors said they are very open to adding new asset managers. This, in turn, presents asset managers with an opportunity to uncover new ways to showcase their value, win over prospects and retain assets, Broadridge said. 

A quarter of advisors surveyed said they plan to engage more with external wholesalers in 2021. Seven in 10 advisors said that an external wholesaler is one of their top three most preferred methods of engaging with an asset manager. 

“Advisors were not able to engage with wholesalers in the same way they did before the pandemic and were initially hesitant to engage virtually,” Schiffman said. “Now, as the COVID-19 vaccine rollouts progress and we may see a return to normal sooner than expected, advisors are eager to re-engage with wholesalers and are receptive to new relationships.” 

The survey found that 77% of advisors are somewhat or very favorable about growing and scaling their practice today, and 67% expect conditions to be better three years from now. 

In addition, 66% of advisors are somewhat or very confident in acquiring new clients today, and 56% expect to see improvements three years from now. 


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