Diverse Investor Needs

Individual investors’ aims, opinions – and financial needs – vary greatly, which is why there is no single ‘perfect’ sustainable, ESG or ethical fund.

Some people are very specific about their preferences and know exactly what they do and don’t want, others are not.

The following are examples of the variety an adviser may come across:

1. Attitude to risk and investment aims vary. This area is no different from any other in that these are investments that must be appropriate in terms of attitude to risk, wealth,  experience, age, health, dependents, income, investment term etc.

2. Motivations and therefore desired approaches vary. For some investors SRI is all about making a difference through supporting and encouraging great companies whilst  avoiding areas they dislike. Many also want their investment to be used to help drive change.

3. Investor’s views can change over time: views can change as a result of a personal experience, or the growing urgency of an issue. More people are concerned about environmental issues than ever before.

4. Depth of interest in issues area vary. Some investors may be well informed and ask for lots of information on a particular subject; others may simply want to know an investment ‘considers sustainability’.  Most are somewhere between the two extremes.

5. People are interested in different issues. For example, some are primarily interested in environmental issues; others wish to focus on social issues. Some may wish to focus on particular areas such as food or water supply.

6. Some people are only interested in one or two issues, however many more are interested in a wide range.

7. Views vary. Even people who say they are interested in a particular issue may have different views. For example – some people may want to invest in funds that engage with oil companies or banks to encourage better practices, whereas others want nothing to do with them.

8. Outlooks vary. Some investors want to seek out new opportunities and solutions by focusing on new, emerging issues; others prefer to focus on higher profile, longer standing and perhaps better understood opportunities or challenges.

9. Personal experience of companies varies. Some people have experience of, or views on, the behaviour of particular companies. They may therefore wish to support or avoid them.

10. Proportion of investment. Some people want to invest a small proportion of their money in SRI funds – others 100%.

This means that different funds suit different people.