More green than glam perhaps – but in the world of ethical and sustainable investment Style still matters! Not offering green or ethical investment to clients is looking increasingly dated these days, but finding appropriate fund options can be hard work. And this is where a knowledge of Style – or more precisely – SRI Styles – can be hugely helpful.
Investors’ tastes vary greatly and advisers need to be able to consider a range of options both from an ethical and an investment perspective. Advisers normally have access to a wealth of information on investment issues – but information on ethical or green investment can be far harder to find. The purpose of the Panacea Fund EcoMarket tool is to address this. The tool groups ‘Sustainable and Responsible Investments’ into a number of Styles based on their approach to ethical and other ‘extra-financial’ issues. These Styles can then be matched to clients’ ethical/SRI aims in order to help you find relevant fund options quickly and easily.
Whether your clients take the view that sustainability is a growing business issue that should not be ignored – or have personal views that could make investing in some areas uncomfortable for them – there is an SRI Style for pretty much everyone now.
The Panacea Fund EcoMarket tool splits the green and ethical – or ‘Sustainable and Responsible Investment’ – market into seven main Styles. The Styles system clusters the main SRI fund approaches into groups that help advisers to understand the major features of what funds actually do and so helps advisers steer clear of some common pitfalls.
The seven main SRI Styles on the Panacea Fund EcoMarket uses are:
- Traditional Ethical (negatively screened funds)
- Balanced Ethical (screened funds that ‘balance’ positive and negative company issues)
- Faith Based (funds that invest in line with a specific religion)
- Sustainability Themed (funds that consider a wide range of sustainability issues)
- Environmentally Themed (funds that focus on environmental issues)
- Clean Technology (specialist clean technology funds)
- Responsible Engagement (funds or asset types that employ dialogue and voting based responsible investment strategies)
Yet these Styles are only useful if you know a client’s Style preferences. This is why (following advisers’ requests), as well as there being an SRI Fact Find questionnaire within this tool there is also a client microsite. This site carries brief, client friendly, explanations of the Styles – as well as an online SRI client fact find questionnaire.
Once completed the questionnaire generates a list of preferred SRI Styles for your client to discuss with you. To generate a list of relevant SRI fund options all you then need to do is add their Style choices into the adviser database tool alongside some other basic fact finding information. Start to finish this should take no more than a couple of minutes!
Very stylish and increasingly popular… research carried out for UKSIF during National Ethical Investment Week last month by YouGov, found that ‘58% of GB adults with investments expect IFAs to be able to advise them on how green and ethical issues of interest to them might shape their investment choices’.
If correct this would indicated that interest in this area is set to increase post RDR. Couple this with the fact the FSA mentions this area in a number of places in FG12/15 and that ISO22222 requires advisers to ask SRI fact find questions and the trend is clear…
The Panacea Fund EcoMarket tool is a free resource for advisers who want to integrate SRI into their business models and advice processes, enabling you to do ‘ethics’ – with plenty of style and no drama!
Panacea Ethical Zone: http://www.panaceaadviser.com/main/p4/16,0,0/ethical+zone.htm
sriServices home page: http://www.sriservices.co.uk/
Advising on SRI: http://www.sriservices.co.uk/advising-on-sri
Eurosif report shows HNWs leading the way: http://www.eurosif.org/