Super industry limiting adviser ability on ESG investing
Limited transparency and disclosure from the superannuation industry is impacting the ability of advisers to advise on environmental, social and governance considerations, according to a wealth manager.
Ethical wealth manager Australian Ethical cited research from the Responsible Investment Association of Australasia that found nine in 10 Australians expect their super or other investments to be invested responsibly and ethically.
Despite this, Australian Ethical head of client relationships Leah Willis said both advisers and consumers are struggling to obtain a complete picture of many funds’ holdings.
“Our experience suggests that Australians want more alignment between their investments and their values but a lack of transparency makes it difficult for advisers to point them in the right direction,” she said.
“The current lack of disclosure by super funds is preventing Australians from knowing exactly where they are invested and what activities they are funding through their superannuation and other investments.”
Ms Willis said Australian Ethical’s experience with Australia’s adviser community indicates that demand for ethical and responsible investing is client-led rather than advice-driven, which is why adviser education is so important.
Further, she said one of the simplest ways advisers can gain transparency over investments and ensure due diligence is by asking the funds directly about their investment process.
“Advisers need to be able to respond to clients’ queries about the impact of their investments accurately,” Ms Willis said.
“For advisers to attract and retain clients and appeal to future investors, it is critical they realise ethical investing is not a fad. It is here to stay.”
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