Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/334519 
Year of Publication: 
2025
Series/Report no.: 
CFS Working Paper Series No. 737
Publisher: 
Goethe University Frankfurt, Center for Financial Studies (CFS), Frankfurt a. M.
Abstract: 
This study evaluates the effectiveness of MiFID II's mandatory elicitation of retail investors' sustainability preferences in aligning investment advice with EU climate goals. Using comprehensive real-world data from 18,250 advisory meetings at a German savings bank, we analyze how clients' expressed ESG preferences influence advisory recommendations and actual investment behavior. Despite regulatory intent, the share of clients stating sustainability preferences declined significantly after mandatory implementation, and expressed preferences rarely translated into changed investment decisions. Our findings reveal a gap between regulatory frameworks and client engagement, highlighting challenges in operationalizing sustainability preferences. We discuss these results alongside ESMA stakeholder feedback and propose practical improvements to enhance alignment and impact.
Subjects: 
Financial Advice
ESG Preferences
Sustainable Investing
Household Finance
Retail Investors
MiFID II
JEL: 
G11
G21
G40
G50
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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