Posted on: September 20th, 2011
Few IFAs are aware that it is in fact possible to specialise in Sustainable and Responsible investment and remain ‘independent’ – but it most definitely is!
To help advisers to be successful in this area there is an organisation known as the Ethical Investment Association. And my thanks go to them for allowing me to spend an interesting and informative day with them recently – for the first time in a long while.
I attended the session to talk about my ‘soon to launch’ Fund EcoMarket adviser fund database tool. I was very pleased with the positive responses and constructive feedback – but was also very to have been invited to spend the day at their event.
EIA members today are a pretty diverse group. All are IFAs. Some are longstanding experts in ethical investment, others are newer to this field. Their interests and tactics vary. But all members are interested in – and committed to – offering green and ethical options to their clients – an activity that is regarded by many as ‘best practice’ in this day and age.
The agenda was diverse – reflecting the mix of attendees.
The morning session was kicked off by a seriously inspirational Social Entrepreneur, Trudy Thompson, from ‘Bricks and Bread’. A former racing driver, Trudy changed career to become a successful EcoBuilder and now spends her time as a ‘change agent’ supporting and encouraging Eco-Living .
Later came Audrey Ryan, the highly rated Aegon/Kames ethical fund manager – to talk about their operations. The Aegon – now Kames – funds are not only successful from a performance perspective, they are also pretty unique. Their ethical screening is far more strict than most, in true ‘Traditional Ethical’ style, focuses heavily on negative criteria.
It was clear from Audrey’s presentation and the percentage of the indices the funds exclude that they really do what they say on the tin, which is always welcome. As with any approach theirs will suit some clients better than others – which in my view is no different from any other fund.
And as if to demonstrated the breadth of this sector, there was also a presentation by Pictet on their Water fund. This single issue environmentally focused fund also has the benefit of having set out it stall very clearly. With growing water scarcity and increasing demand the longer term investment potential is clear (if complex) . The funds invests in all aspects of the water supply chain however its narrow focus probably makes it more of an ‘icing on the cake’ kind of fund than a staple for most retail investors… but an area to consider none the less as its importance will clearly grow over time.
Another area that is bound to grow over time, but is otherwise unconnected, is the drive towards professionalism amongst the adviser community. With RDR just around the corner and gap filling well underway a presentation by Michelle Hoskins from Standards International wrapped the day up in a timely fashion – reminding attendees of the benefits of increasing professional standards . Standards International help advisers to achieve the adviser best practice standard ‘ISO 22222’ – which allows advisers to use the coveted British Standards ‘kitemark’ logo, amongst other benefits.
The ISO standard requires advisers to ask clients if they would like to have ‘Environmental, Social, Ethical and Religious’ issues taken into account when considering where to invest, in recognition of the growing importance of these areas to so many investors.
The EIA, and in particular its former chair Robin Keyte, has supported the ISO standard since it was but a twinkle in the eye of the international standards organisations – and it was great to hear that some EIA members had already achieved the ISO standard – trail blazing for the adviser community!
This is just a taste of what went on during the day – which as one of the attendees remarked was ‘an excellent event with a five start agenda’. It was, in my view, well worth a day out of the office – even for an old hand who has been in this field for many years!