TD Ameritrade Institutional is trying to make it easier for registered investment advisors to meet their clients’ demands for environmental, social and governance (ESG) investing options.
The firm on Wednesday announced it has added the Model Market Center platform as a tool for advisors who custody with TD Ameritrade Institutional. The platform allows advisors to put ESG investments into portfolios by accessing third-party managers, TD Ameritrade said. Advisors are able to access investment models that meet their clients’ criteria for investing sustainably while keeping in mind the client’s overall risk tolerance. The models carry no extra fees and have no minimum investment.
Total U.S. assets in socially responsible investments grew by a third to $8.72 trillion between 2014 and 2016, approximately one-fifth of the $40.3 trillion in total U.S. assets under management, according to US SIF Foundation, a research and educational organization for sustainable investing. One third of RIAs have seen increasing client interest in socially responsible investing over the past year, according to a recent TD Ameritrade Institutional client survey.
“One in three advisors say they are seeing more demand from clients for sustainable investing [and] 75 percent of investors say they are interested in investing in a way that meets their values,” said Dani Fava, director of product strategy and development at TD Ameritrade Institutional. “But RIAs do not always know how to put together a strategy to do that. Our new platform provides a complete asset allocation strategy. Building socially responsible strategies can be challenging, requiring time and expertise, so we’re working to make it easier for advisors to provide them.”
According to Spectrem Group, more than half of millennials say they make investing decisions based on SRI factors, compared with more than 40 percent of Gen X and baby boomer investors.