In a busy year for the US wealth management network, it has partnered with a specialist in the ESG field to deliver more capabilities to advisors.

Dynasty Financial Partners, the US wealth management group, has partnered with tech-driven asset management firm Ethic to bolster its environmental, social and governance investing capabilities.

The move is yet another sign of how ESG approaches are being rapidly embraced in global wealth management. (To see an article examining this issue, see here.)

Ethic’s work with Dynasty allows financial advisors in the Dynasty network to create custom, tax-efficient passive equity portfolios that match up clients’ personal values and financial goals. Advisors will have the option to either select from existing thematics, or to create a custom suite of investment portfolios/allocations that are based on a range of underlying benchmarks and reflect their firm’s sustainability priorities.

“We believe that sustainable investing represents a tremendous opportunity for advisors to forge deeper client relationships, increase retention and capture the next-generation of wealth holders,” Nick Gerace, senior vice president of investments at Dynasty, said.

The move is part of a busy year for Dynasty, which has added more wealth management firms to its embrace and developed a new loan facility for firms going independent. On May 30, Dynasty Financial Partners launched Dynasty Connect, a platform to support independent advisory firms with private M&A transactions.

The rise of organizations such as Dynasty reflects how advisors that have broken away from existing large firms are seeking partners to provide certain services that are too onerous to perform in-house.

Dynasty said the ESG trend is strong, citing figures from the US SIF Foundation showing that $12.0 trillion of professionally managed assets in the US now incorporate sustainable, responsible and impact investing strategies, rising by 38 per cent from $8.7 trillion in 2016.

“Advisors who can have authentic and informed conversations with their clients surrounding their distinct values, and offer them tailored investment solutions, will likely be well positioned for future growth. As client expectations continue to grow, advisors are seeking refreshing ways to deepen and enrich existing client relationships, as well as a consistent means to win new ones,” Jay Lipman, co-founder and president of Ethic, said.

Ethic’s solution draws from data sources to aggregate, analyze and predict sustainability issues. It uses quantitative portfolio construction to track underlying benchmarks and match market performance. It also offers reporting capabilities that advisors can use with clients.