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'Ethical' planners control $1.5 billion

Financial planners who specialise in responsible investing control direct client portfolios worth at least $1.5 billion – but under-reporting is rife in the sector.

The 2013 Responsible Investment Benchmark Report surveyed 30 financial planning firms that confirmed they advise clients on direct ‘core’ responsible investment portfolios.

The portfolios controlled by the firms totalled $1,532 million as at 31 December 2012 – which is steady when compared to the $1,539 million recorded for the 28 firms surveyed on 30 June 2011.

“This segment suffers from under-reporting as advisers that are known to provide this type of service are sometimes unwilling to share funds under management – information they regard as commercially sensitive,” said the report.

“As such, these numbers are likely to be very much underestimated,” it said.

The directly managed investment portfolios held by these advisers is in addition to their investments in responsible investment funds, said the report.

$152 billion, or 16 per cent, of the total assets under management in Australia as at 31 December 2012 was invested in responsible investment portfolios.


Of that $152 billion, 89 per cent of the funds were invested via environmental, social and governance (ESG) integration strategies.

Responsible investment funds outperformed mainstream funds over nearly every time frame across three categories – Australian equities, international equities and multi-sector growth funds, according to the report.