Australian Ethical has revealed that adviser-related flows have increased 135 per cent from $61 million in 1H21 to $145 million in IH22.
The fund manager said the jump reflects an ongoing investment in its adviser channel, including the launch of an adviser resource hub and a new online resource to assist advisers talk about climate with their clients.
The news comes after a study conducted by the Responsible Investment Association Australasia (RIAA) in March revealed that knowing about responsible investment is now the top expectation of financial advisers.
Over 1,000 Australians surveyed this year expect their advisers to be knowledgeable about responsible investment, which increased from 54 per cent in 2020 to 64 per cent in 2022.
74 per cent of Australians are considering moving to another provider if they found out their current fund was investing in companies inconsistent with their values.
“Australians are increasingly demanding ethical investment options from their advisers, fund managers, super fund providers, and other investment professionals,” John McMurdo, CEO and managing director of Australian Ethical said this week.
“It is no longer acceptable for money managers to solely chase solid returns. We must also achieve solid returns through ethical means on top of delivering financial outcomes.
“For this reason we have built on our 35 years’ experience as Australia’s pioneering ethical investor, by further shoring up the ethical pedigree of our Investment Committee and adviser offering.
“We hope to help more advisers take full advantage of the surge of interest in responsible and ethical investing that is accelerating flows of our funds.”
Just a few weeks prior to the RIAA study, research released by behavioural finance experts Oxford Risk suggested advisers face losing clients over a perceived lack of focus and commitment to ESG investing.
According to Oxford Risk, two out of three retail investors are considering transferring their investments to a new adviser purely based on their current adviser’s engagement with ESG.
In fact, one in five said they have already done so or intend to do so.
Interesting comments. Hard to believe in 2022 anyone would still be dismissive of where this is going.
This will not end well.
Where in trust law, which governs the majority of our super assets, does it say that ‘solid returns’ are okay for members provided ethical means have been considered? Are the fund managers’ ethics at AE identical to their members, or are they imposing their ethics on their members. I would’ve thought a more contemporary approach would be to understand the ESG risks in a potential investment decision and then make an informed decision as to whether to underwrite those risks or not, to maximise a members return.
There is an implicit term, if not explicit, in the contract between the parties that the funds should be invested in a certain way. It’s like lending your car to your kids on the understanding that they will not do burn outs and drag racing.
The Responsible Investment Association Australasia (RIAA) conduct a study, and wowwee it says, “74 per cent of Australians are considering moving to another provider if they found out their current fund was investing in companies inconsistent with their values.” Who would have thought hey! Somehow I don’t think they were ever going to get a result in opposite to this survey. Straight from the ASIC playbook for surveys.