Realizing ESG’s Full Potential in Wealth Management

Karen Sears – 08/12/2021

ESG is the approach that includes environmental, social, and governance factors such as climate change, health and safety, and diversity in financial and business decisions. ESG continues to be an increasingly important topic in the investment community, as more investors look to align their investment objectives with their values. Significant inflows into ESG funds provides the industry with real data, and we have also heard directly from our advisory clients. Many continue to explore how to best position all ESG factors in their practices. 

As we are committed to supporting our current and prospective clients, we evaluate broad topics such as this to ensure the Black Diamond® Wealth Platform delivers on the innovative technology firms need to navigate the ever changing wealth management landscape. We ask questions such as:

  • How relevant is this topic?
  • Is it forward-thinking and do we anticipate this topic will inform strategic choices, drive innovation, and articulate how long-term value is created?
  • How far should we take the supporting capabilities?
  • What problems are most important to solve?


With various opinions supporting, detracting, and generally evaluating ESG and impact investing overall, we have made strides to understand our client sentiment more broadly. We recently shared questions and a request for input across our client base and, as always, our clients provided a wealth of feedback. Of those responding, approximately 50 percent of advisors are actively incorporating ESG and impact investing strategies in their practice today, and 50 percent have yet to begin integrating ESG factors in to their portfolios.

Nonetheless, overall interest in ESG investing was resoundingly positive and there is a high level of support for incorporating additional ESG capabilities within Black Diamond. We are pleased to hear that advisors believe they have as high a level of interest in responsible investing as their current investor base and, anecdotally, this is an investor-interest driven topic. Nearly unanimously, we heard that ESG is a topic that people believe will increase in importance in the future as investors look to make more precise decisions.

When it comes to the “how” – the highest level of interest was generated by the desire to present how a client’s current portfolio evaluates relative to ESG factors. We heard data transparency and methodology are important in order to be transparent in how portfolio analytics are presented.  There are many established and emerging market data sources in this space and we have been actively researching the best fit here. In close second, we heard interest in capturing client preferences as they relate to these factors. Feedback detailed moderate support for help in implementing investment strategies based on client preferences as well as the ability to screen and evaluate investments based on client preferences.

We also received positive feedback from advisors on two of the firms in our integration ecosystem. Specifically, platform integration partner, SMArtX, a full-service, turnkey asset management platform (TAMP), who offers advisors access to a wide range of ESG strategies from leading fund managers. Another partner, leading technology platform Act Analytics, allows advisors to download portfolios from Black Diamond into a comprehensive ESG analytical framework. This functionality is already equipping advisors to compare and contrast portfolios with benchmarks from more than 200 ESG factors across 100,000 mutual funds and ETFs, and more than 20,000 publicly traded securities.

Ultimately the input and ensuing dialogue has helped our team validate the importance of ESG capabilities to the future of Black Diamond. We want to continue to hear feedback as this important topic evolves and we will continue to share how innovation can help support your business.


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