An investment that is based on ecological, social and corporate sustainability (ESG) is increasingly popular with customers.
Many consumers are persuaded by the argument that their investments can give direction to change.
But this means that other information becomes more important for your decision than it used to be.
Clients and financial intermediaries have to deal with complex ESG issues.
Editor in business, responsible for “People and Business”.
Follow I follow
Brokers are facing an important new task, says Jörg Arnold, CEO of Swiss Life in Germany.
This also includes the financial sales force Swiss Life Select (formerly AWD).
In surveys and in practice, a basic interest in sustainability can be determined.
However, this does not automatically create a demand: “Only when people are informed about the offers by experts does interest arise,” he says.
The task of the sales force is to make it clear to the customer how the new products fit their financial needs.
"With this pilot task, the advisory service ensures that old-age provision not only suits people's individual needs, but also strengthens sustainable developments," he says.
Brokers also have a pilot function through the sustainable investment offers
Part of this pilot function is that intermediaries only make offers to their customers that stand up to strict scrutiny.
This would mean that the financial intermediaries would set the standard for the product providers.
“So it's also about separating the wheat from the chaff of sustainable financial products.
A quality competition is then the positive result, ”says Arnold.
Brokers who do not act on behalf of the provider, such as brokers, independent financial distributors (MLP, Swiss Life Select), have always taken on this role.
Recently, however, sustainability has also been added to the task of finding the best-performing offer for the consumer.
In Arnold's idea of a fair financial market, people with low and middle incomes should also have access to investments in ecological, social and well-run companies.
At this point he contradicts the opinion of many politicians who have developed sympathy for advice against fee in recent years.
In the UK and the Netherlands, this has even led to the banning of commissions and brokerage for the brokerage of financial products.
Low income groups should retain access to counseling
But Arnold takes the position of many financial service providers when he says that the free advice provided before the product is concluded will benefit households that do not have such high incomes. "This also gives the low and middle income groups access to sustainable investments," says Arnold.
In his opinion, this shift to sustainability should also be accompanied by a shift to diversity. “The brokerage is still largely too male-dominated today,” he says. In order for sustainable investments to spread further, other realities of life would also have to be reached. "I am convinced that diversity in counseling will reach people who today may not feel adequately supported because of their age, gender, origin or sexual orientation," says Arnold.
The differences in level of financial investments between men and women (gender pay gap) are an issue that financial distributors have to deal with. But that is not only their job, but also that of the financial service providers. The industry must ensure that the financial intermediary profession becomes more attractive for groups that have previously been underrepresented. Only if this succeeds will a sustainable investment be accepted by all consumers in the market.