Top Tips for getting in to SRI

  • Growing Demand. Interest in green and ethical issues is increasing dramatically. SRI is part of a societal shift which is set to continue over the longer term as a result of a diverse range of pressures. This presents significant new opportunities for advisers. Ask every client you meet if they are interested in green and ethical investment and review existing clients as views are changing fast in this area.
  • Performance. SRI funds often perform differently from other funds. Not better, not worse, but differently. This is because they often invest differently from other funds.  SRI options that perform almost exactly in line with mainstream benchmarks or non-SRI funds probably invest very similarly to other funds. This may or may not be what a client wants.
  • Fact Finding. Ask sufficient fact-find questions to work out what kind of SRI client you are dealing with. Many people favour positive, forward-looking investments that seek out opportunities by focusing on social and environmental issues alongside financial criteria. Some clients want to put their ethical values first. The SRI market caters for both points of view. IFAs should not be lulled into thinking the latter group represents the whole market.  They are not.  Understanding that different investors need aims and opinions helps open up new opportunities.
  • Meeting SRI aims. Most of the time there are investment options that will suit your clients’ needs.  Sometimes investors may have to compromise. Investors should be made aware that investing part of your money ethically or into greener companies is better than not at all. It is often worth alerting clients so this possibility early in the advice process. It is also worth being aware of which fund managers carry out extensive engagement activity as ‘engagement only’ funds are often useful alternatives.
  • Mix and Match. Many green and ethical investors also invest in non-SRI funds. This reflects normal life. Even the most committed ethical enthusiast rarely buys only ‘ethical’ products in their everyday lives and most of the worlds environmental enthusiasts drive cars. This is not the contradiction it may appear to be – it is pragmatism.
  • Meeting financial goals. Explain to clients that their SRI aims need to sit comfortably alongside standard financial considerations if they are to achieve their financial goals. This may mean balancing different SRI styles alongside each other and non-SRI styles. For most clients this can work well.
  • Help spread the word. If a fund you are interested in is not on the platform or wraps you use – ask for it to be put on! Platforms respond to demand.
  • Join in. Keep an eye on sites such as this to keep informed about SRI. Be part of Good Money Week.
  • Publicise your work. List ethical investment as one of your areas of expertise on and write articles in local publications about it.
  • Be yourself! You do not have to share your clients’ opinions in order to offer sound advice.