Last week, the Portfolio Managment Association of Canada held their National Conference. This year’s slogan was “Rebooting and Rebuilding. A Path Forward”. This yearly conference is one of the must-attend event in the space of the Canadian Wealth Management, as it gathers a significant number of relevant stakeholders from the Canadian wealth industry.

ESG is top of mind

One of the main topics that was discussed was – how could it be different – ESG. Europe is probably most advanced in the ESG debate; other territories are following. But are we going to save the world by this change in capital flows? The answer is that this, alone, will not go to change the world. On the one hand, investors are looking for returns, on the other hand we need to cut the carbon emissions. Bringing both the sides of the coin together in ‘Green Growth’ is something that, according to the event panel, is still in its early stages, and that probably will reach its full potential in 10-15 years. Investors that decide to shift a part of their capital flow to the green economy, and accurate ESG reporting that shows investors the impact of their portfolio on carbon emmissions are examples of first steps in this change process.

A choice to be explained

Hence, it is important that Wealth Managers can clearly explain to investors the impact of their portfolio and the impact of new additional and more sustainable investment decisions. A crucial role is with data providers and fund managers to provide the right data analytics and transparency. Software vendors need to translate all this into understandable models that can explain to the investors the impact of sustainable choices on their portfolios.

A step further

Another important point emerged during the discussion was that, overall, big and small financial institutions are continuously looking to make the necessary changes in their processes and tools to reduce redundant costs by increasing the flexibility to communicate with clients. In the last years, a lot of effort has been put in the ‘How’. Wealth and Investment firms are communicating to clients via different media. Nowadays, the majority of firms have portals and Apps in place, to replace paper-based communications and documents addressed to their investors. The next challenges, today, are in the ‘When’ and ‘What’ Wealth Managers communicate to their clients: the focus will be put on hyper-personalization of the client relationship, ensuring that selected and relevant information will be presented at the right moment.