Dr Ylva Baeckström of King’s Business School highlights how regulations can help close the advice gap in terms of clients’ sustainability preferences.
Read this article to understand:
- How the Consumer Duty regulations affect financial advice in the area of sustainability
- How this presents both a challenge and an opportunity to financial advice firms
- How King’s Business School’s free course can educate advisors on what is required
The Consumer Duty rules reinforce the importance of advisers understanding sustainable investing where it is relevant to delivering good customer outcomes. King’s Business School’s free course - Consumer Duty in an Age of AI and Sustainability - helps advisers feel confident talking about these topics with clients and supporting them to reach their investment goals.
The Consumer Duty requires financial firms to deliver good outcomes for customers, including ensuring products with any ESG (environmental, social and governance)-related or sustainable characteristics are appropriate for customers' needs and objectives. This presents both a challenge and an opportunity to financial advice firms.
Even though these rules started over two years ago, lots of advisers still don’t feel they know enough about sustainability and Consumer Duty. For example, just 46 per cent of advisers joining a Kings College course on sustainability and Consumer Duty in October 2025 either strongly agreed or mostly agreed that they were knowledgeable about sustainable investing.
Just over a third found it was easy to find information about sustainable investment products to recommend to clients. And over three-quarters wanted better clarification about regulations related to sustainable investment advice.1
Giving advisers the confidence to engage with clients on sustainability
Consumer Duty encourages advisers to understand their clients' objectives, including any sustainability preferences, so they can support good customer outcomes.
My research shows that many people want to invest sustainably, but a lack of knowledge is a barrier.
Advisers can help clients fulfil their desire to invest sustainably
That gap needs to be addressed. So, IFAs have a critical role to play in raising the topic of sustainability with clients and educating and guiding them when it comes to investing sustainably. That, of course, means that IFAs must have expertise in this complex topic too. That is why King’s Business School is offering a free online course, aimed at helping IFAs, Paraplanners and Compliance professionals, navigate the new sustainability landscape.
The course, generously supported by Aviva Investors, includes modules expertly designed to help manage the increased reporting and changed requirements of the Consumer Duty within your own firm and provide confident advice around sustainability.
After completing the course, advisers will have a thorough understanding of:
- The basic ideas, key concepts and principles that relate to sustainability concerns in investing
- The risks climate change creates for the financial system, the role of the financial system in the transition to a low-carbon world and the opportunities created for investors from this transition
- The link between the Consumer Duty regulations, sustainability, and how these integrate into the financial advice process
- What greenwashing is, why it matters, how to spot it in marketing, and how to avoid it when giving advice
With this new-found knowledge, advisers can flip the intention gap and help clients fulfil their desire to invest sustainably. Certainly, a wide range of ESG-related issues are motivating people to invest sustainably.
Our research shows climate change will slow down economies around the world over the next 40 years mainly through its impact on supply chains. Climate change is expected to cause a total net economic loss of between $3.75 trillion and $24.7 trillion in adjusted 2020 dollars by 2060, depending on how much carbon dioxide is emitted.2
Many consumers care deeply about the environment and the world that future generations will inherit. There are opportunities for investors to make a difference by helping fund the transition to more sustainable sources of energy and associated environmental issues such as biodiversity.
IFAs can help clients overcome the challenges, such as greenwashing, and maximise the impact of their investments. They also have a role to play in explaining the risks to the environment, the global economy and people’s lives that are associated with not investing sustainably.
The role of advisors in empowering female investors
There are significant opportunities for financial advisory firms to contribute to addressing certain diversity, equity and inclusion challenges. Specifically, these include addressing the widening investment gap between men and women in the UK. In 2026, the number of male investors, at 11 million, was much larger than the 7.4 million female investors.3 In monetary terms, the gap stands at a staggering £574 billion. The average amount women invest, per capita, stands at just £24,000, compared to £48,000 for men.3
IFAs can play a key role in helping to close this gap. Being curious about female clients in an understanding and a non-judgmental approach is key. If your client is running her own business, for example, it’s likely she will have worked very hard to acquire wealth. If she feels patronised in a meeting, she may simply walk away.
Critically, women are typically more active sustainability investors than men and are typically more interested in advice on sustainable and ESG-related products than men. Around 45 per cent of women who hold savings or investment products want their investment manager to focus on these considerations, compared to 34 per cent of men.4
It’s important not to just recommend investments you know and like. Instead, ask clients about their preferences, especially when it comes to sustainable investing. That way you can guide them towards products that align with both their investment goals and values.
Our online course will give you the confidence to raise sustainability topics with your clients and guide them through this complex area and help them make the investments that best suit their interests and needs.
Consumer Duty in an Age of AI and Sustainability, is a free 14-hour online course offered by King’s Business School. The next course begins on November 5 with applications deadline October 16. Further intakes will be available in 2027.
To find out more visit: Consumer Duty in the Age of AI & Sustainability | King's College London
References
- Source: King's Business School survey of course attendees, October 2025.
- “Climate disruption to global supply chains could lead to $25 trillion net losses by mid-century”, King's College London, 13 March 2024.
- Boring Money, “UK Gender Wealth Gap Widens in 2026 - but more women are investing”, Boring Money Business, 18 March 2026.
- Women and the rise of ethical investing, 21 March 2022.
