Italy sees strongest interest in ESG among financial intermediaries

ESG continues to grow across Europe, but nowhere as quickly as in Italy

Key points:

• Italy has the highest percentage of financial intermediaries who currently apply ESG criteria to their fund selection as well as the highest percentage of intermediaries who expect to increase their exposure to ESG in future
• Italian intermediaries were the most satisfied with asset managers’ communication during the pandemic among the markets surveyed
• Most intermediaries said their use of desktop and mobile has increased substantially, while their use of print has decreased. The changes in media usage are more substantial for DPM-FS than for advisers

Of all the markets recently surveyed by Fundamental Media, Italy has the highest percentage of financial intermediaries who currently apply ESG criteria to their fund selection as well as the highest percentage of intermediaries who expect to increase their exposure to ESG in the future.

The southern European country is also the market where the highest percentage of intermediaries say their clients are interested in ESG and that asset managers deliver on ESG.

When it comes to their expectations for other asset classes, Italy is in line with the other markets surveyed as Italian financial intermediaries also expect to increase their clients’ exposure to emerging market equities and global equities in the next 12 months and expect a decrease in real estate and fixed income.

From December 2020 to March 2021, Fundamental Media surveyed 768 financial intermediaries in France, Germany, Italy, Spain and the United Kingdom to better understand their choices, with a focus on the implications of the Covid-19 crisis on asset allocation, working habits, access to media and their preferred sources of information.

Response to the pandemic

During the pandemic, most Italian intermediaries switched from mainly working from the office to working from both their home and office with less than a third of advisers working fully from home. Unlike advisers in the UK, who mainly worked from home during the pandemic, around 70% of advisers in Italy have kept commuting, even though less frequently. Commuting time was replaced mostly with additional working hours.

The Covid crisis has also had an impact on intermediaries’ interaction with their clients and asset managers, which has become more frequent and mostly virtual. Proactive communications from asset managers were greatly appreciated by most respondents, as Italian intermediaries were the most satisfied with asset managers’ communication during the pandemic among the markets surveyed.

An overwhelming 80% of advisers and 85% of DPM-FS were either very or quite satisfied with managers’ communications. Unlike advisers, who wished for a more personable approach, DPM-FS suggested communication improvements on the relevance of content as well as more interactive and digital services.

The pandemic has also massively affected events and conferences, but most intermediaries have taken this in stride and have attended the online version of the events they usually attend. Nearly half of advisers perceived the switching to online events as an improvement that saves commuting time and offers a greater choice of events.

However, Italian advisers, along with their German peers, show the highest dissatisfaction with online events, with a third perceiving them as a hindrance. DPM-FS are even less likely to perceive online conferences as an improvement and a third of them have decreased their overall participation in events. Even though the main downside – the missed networking opportunity – was the same across all markets, the results suggest that for Italian intermediaries networking is even more important when attending events.

Media readership

When asked about changes in the use of media formats, most financial intermediaries said their use of desktop and mobile has increased, while their use of print has decreased. The changes in media usage are more substantial for DPM-FS than for advisers. Of all markets surveyed, the use of desktop has increased the most in Italy and, along with the UK, the decrease in print is the highest. Compared to advisers, Italian DPM-FS are less reliant on print and TV and more on radio. They are also slightly more desktop-oriented than advisers.

Nearly half of the advisers receive print publications at the office and almost a third of them receive them at home, compared to DPM-FS who tend to not read print publications or to receive them at the office. Compared to their peers in other markets, Italian advisers are the most likely to buy print publications at the newsstand, especially newspapers. Those who have been working from both home and office are even more likely to do so, suggesting that they might read them while commuting.

Other findings from the Italian intermediary research include:

• While less than a third of Italian advisers do not use ETFs, the use of ETFs has increased over the years and, together with Germany, Italy has the highest level of ETF usage among the markets surveyed. DPM-FS are much more likely to use ETFs than financial advisers and more likely to use them as niche asset classes.
• The professional use of social media has increased substantially in Italy compared to 2018. For Italian advisers, WhatsApp, LinkedIn and Facebook show the highest use among the European markets surveyed. LinkedIn is used more by DPM-FS than by advisers, especially to read/watch content from asset managers. On the other hand, advisers are using WhatsApp and Facebook more compared to DPM-FS, especially to publish content and contact their clients.
• Along with Spain, Italy has the highest podcast listenership: 84% of advisers and nearly 80% of DPM-FS listen to podcasts. Nearly 66% of advisers and 58% of DPM-FS listen to podcasts at least once a week.

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