Speaking in Sydney on Tuesday, Australian Ethical chief investment officer David Macri said advisers have a role to play in educating clients about responsible investing.
“Ideally, we’d love to see the question asked to their clients, every time they sit down and do a fact-finding type analysis, ‘what do you think of responsible investing?’ ‘Do you want your investment to align with your values?’” Mr Macri said.
He said the more questions that were asked of advisers, the more awareness this would raise about responsible investing and the better for the industry, for financial markets and for the world.
Advisers needed to be doing more, Mr Macri said.
“We are seeing a lot of demand from advisers, we are seeing a lot of questions being thrown at them, so there is a need for them to come up with a solution,” he said.
“We have a sensible, logical rationale that dictates why we are in certain sectors and companies which then provide peace of mind to the adviser in answering the questions that they are getting from their clients.”
Australian Ethical head of client relationships Leah Waldie said that there had been an increase in the inclusion of ESG or sustainability ratings by data providers and platforms.
“Some are questionable in terms of how they’re constructed, and we may not necessarily always agree with those, but I think it’s a very positive move and it’s showing that there is a growing awareness and need or demand of that from consumers,” Ms Waldie said.
“I agree advisers have a little way to go. It’s not part of their traditional process, but the growth that we’ve seen in adviser numbers for responsible investing is sort of testament to the increase in consumer demand and the increase in demand from advisers to understand more about this space.”
I think ethical investing doesn’t really work well in Australia. The last time I looked at Corporate Monitors the big 4 banks were in the top 10 of ASX 200 companies, which is concerning especially for CBA and talk for some time for a royal commission.
The problem I see is that there is no choice but to arrange negative screening, rather than positive screening, which at times can be subjective. There is an index called Cleantech Index that is made up of 62 stocks that is 1/8 the size of CBA. Considering the liquidity of some of these stocks there is no ETF.
Until governments and large corporations change their tune in this area, I don’t see value in ethical investing in Australia. I am happy to be proved wrong David.
Wow! would it really kill you to be a little positive just for a sec and engage your clients in some menaingful conversation? PS; not ALL advisers are busy with this much paperwork; if your SOA is STILL 50 pages in this day and age, perhaps you need to do some work on your business…..just a positive thought/ idea that may assist in freeing up some time for client engagement.
A fair point
Sorry David, all advisers are too busy filing in paperwork and writing 50 page SOA’s to educate clients about your product. How about you do something about it rather than putting another duty on advisers.
Motion by Researcher seconded and PASSED. David…over to you.