Sustainable Investing  

Why psychometric testing is best for sustainability views

  • Describe the challenges of psychometric testing for sustainability
  • Explain some of the differences in attitude among the generations
  • Explain some of the emotional aspects of investing sustainably
CPD
Approx.30min

While investors are debating the importance of including sustainability factors within their portfolio analysis, advisers do not want to cause greater confusion for clients, leading them to believe they are investing in things that they are not.

As a result, the Financial Conduct Authority intends to publish its final requirements for sustainability disclosure and investment labels by the end of June 2023.

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This will provide greater consistency and a framework that advisers can use in conjunction with a valid psychometric questionnaire capturing client’s sustainability preferences. 

Louis Williams is head of psychology and behavioural insights at Dynamic Planner 

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. Why is it not a good idea to ask a client a single question over their ESG preferences?

  2. Which of the following is NOT a factor cited by the author as an element of clients' approach to sustainability?

  3. Clients always think about how the behaviour of companies they invest in impact the environment and society, true or false?

  4. The emotional benefit of sustainable investing is the most significant factor for investors, who see sustainability as being of high importance, true or false?

  5. Which of the following statements is NOT true regarding generations and attitudes to sustainability?

  6. Women are more interested in sustainable investing than men, true or false?

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You have successfully answered all the questions correctly, well done!

You should now know…

  • Describe the challenges of psychometric testing for sustainability
  • Explain some of the differences in attitude among the generations
  • Explain some of the emotional aspects of investing sustainably

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