Canada’s Responsible Investment Association’s 2025 Advisor RI Insights Study reveals a notable increase in advisors who feel that it is not their role to offer Responsible Investment (RI) in their practice: 21% among those who don’t offer RI, up from 13% in 2023. This suggests that non-users are actively stepping back, potentially unaware of the opportunity they are missing to service clients.
Declining RI adoption
This growing role ambiguity is contributing to a widening RI service and fulfillment gap. Overall advisor adoption of RI has declined to 64% from 73% in 2023, driven largely by a lack of new entrants. The decline was particularly sharp among bank brokers (74% to 58%) and mutual fund firms (78% to 67%). Commensurate with the decline in overall use, the average proportion of all advisors’ Assets Under Management (AUM) dedicated to RI has retreated from 10% to 8%. It is important to note that advisors who already use RI remain committed and are using it just as extensively, allocating similar proportions of client assets to RI as in previous years.
Other AI adoption numbers:
- 12% of advisors have clients with RI (down from 14%) on average in 2023
- 8% of advisors’ AUM is in RI (down from 10%) on average
- 44% of advisors say less than 20% of their clients currently hold RI
- 52% of advisors say less than 20% of their AUM is comprised of RI
Understanding the barriers: Time pressures replace greenwashing fear
The reasons behind this inertia have evolved. For the advisors who do not offer RI in their practice (non-users), competing priorities (32%) have now surpassed greenwashing concerns (31%) as the top reason. This shift signals that the significant demands on an advisor’s time, not ideological resistance, are driving this inertia.
Furthermore, RI users are failing to initiate conversations. Advisors who use RI are increasingly waiting for clients to raise the subject (41%) rather than leading the discussion themselves (28%). This passive approach stands in stark contrast to the finding that investors express interest in RI. Advisors are missing the opportunity to discuss RI with clients.
Aligning advisor practices with client demand
To address this inertia and align advisor practices with client demand, the industry must implement targeted, structural solutions:
1. Integrate RI into the KYC process: A key opportunity exists in formalizing client conversations: almost half of all advisors (46%) believe RI questions should be included in Know Your Client (KYC) forms. Not surprisingly, extensive or moderate RI users are more likely to agree (75%), although one-third of non-users also agreed. This suggests advisors generally see this as a practical way to initiate client conversations.
2. Transform wholesaler support: Wholesalers are recognized as a critical channel for education and influence. For non-users, wholesalers remain the top source of RI information (45%), compared to just 23% for the next highest source. Advisors (both users and non-users) are most interested in performance data, tools to compare products, and general support from wholesalers, but are least interested in foundational knowledge and training.
It’s worth noting that investment company RI/ESG specialists are not the most sought after source for learning about RI, which is even more true for advisors who don’t use RI. The latter would even go to manufacturers’ marketing information before the RI/ESG specialists for RI information.
3. Accelerate product education on modern solutions: While mutual funds dominate, ETF use climbed significantly from 4% to 8% in 2023. Targeted campaigns showcasing modern RI solutions should focus on the 24% of non-users who are currently open to incorporating RI into their practice (up from 19% in 2023). Encouraging these potential new entrants would help bridge the gap between investor demand and declining use of RI
Let’s discuss what strategies can help you talk about responsible investment with clients.
