The platform provider said its new white paper, Investing for the future, with clients of the future, outlines environmental, social, and governance (ESG) trends as well as providing expert insights, which go alongside its new ESG ratings functionality.
Morningstar ESG analyst Erica Hall said clients who choose responsible investments tend to have a more long-term view compared with other investors.
“When investors choose investments that are aligned to their values, beyond just performance, they’re more patient because they have complete clarity on why they’re invested,” Ms Hall said.
“As a result, these investors tend to hold the course and stick with their adviser even in times of market volatility.”
As part of HUB24’s new ESG functionality, and through collaboration with Morningstar and RIAA, advisers using the HUB24 platform can access data-driven insights and reporting metrics for selected managed funds and more than 350 Australian listed securities.
The platform provider said the new solution allows advisers to see how well ESG risk is managed or considered, enabling them to engage with their clients to find investments that align with their values.
Speaking on a recent HUB24 webinar, Ethinvest general manager and financial adviser Fiona Thomas said conversations about clients’ preferences and ESG risk profile have changed significantly.
“It used to be more of a tick-box approach where clients selected investment areas they either wanted to avoid or promote in their portfolios,” Ms Thomas said.
“Over time, we’ve learnt the value of asking open-ended questions to discover this information, so we aren’t leading people towards or away from particular areas but are instead hearing what’s really important to each client.
“For advisers, one of the other benefits of matching the investments you recommend to your clients’ values, is that clients then tend to be more focused on what their money is doing in the world, rather than how it has performed over the quarter or the year — they have that long-term perspective.”
Nathaniel Chell, director and financial adviser at Sky Summit Financial, added that sustainable investments are a logical fit for clients with 20 or more years to invest.
“Our clients are looking for companies that are still going to be around in 20 years, we don’t want to invest them in companies that may potentially end up with a huge amount of regulatory risk or stranded assets, or companies that won’t be able to operate because they have unacceptable environmental or social standards,” Mr Chell said.
Instead, he said companies that have the social and environmental licence to continue operating into the future are a better option. In most cases, he said, these are innovative companies that are trying to do the right thing and are set up to be here for the long term.
