“We can get one-off approval that is specific to individual clients and specific products. While it means that sometimes we need to go back to the research team, we are consistently having to justify the quality and why a product suits a client.
“I think that we are always on our toes and able to make an argument outlining why something is suitable [from] a morals standpoint and also financially.”
Private and Priority Financial Planning is part of the BT Financial Group and senior financial planner Colin de la Nougerede says BT has encouraged the process of offering RI investments over the past five years.
“As the investment and social environment is changing and investors’ attitudes regarding ethical, environmental and moral issues are becoming more aware, having the avenue to provide investment opportunities to cater for this change while meeting investors’ needs for wealth creating is important,” he says.
WHO DO YOU TALK TO?
Trina Wood, from Green Associates (within the Axa dealer group) says it’s worth asking all new clients about their interest in RI portfolios.
‘Ultimately you are there to give them advice that suits their objectives and values’
“The trick is finding how ‘green’ they are. Some clients want to add an RI fund to their ordinary portfolio while others want to invest solely in RI funds,” she says. Putt concurs it’s worth talking to all clients about RI.“We have found that people who may have initially said that they were not interested have ‘come around’ as time went by. It is still not unusual to come across people who say, ‘I didn’t realise you could do that’, in regard to investing in line with your values.”
Putt has found, however, that despite a greater “greenness” in society, that apathy can sometimes prevail.
“We saw recently that 12 per cent or so of the population are happy to vote green, but only a small fraction of money invested is ‘green’.”
TIPS FROM THE FRONTLINE
Thomas says he wishes someone had told him back in 1989 that “we were five or 10 years early”.
Wood says she wishes someone had given them a secret formula for marketing their RI offering, particularly to existing clients.
McLeod says the most important tip she could give to someone starting out in RI is to “really listen to what’s important to your clients”.
“Ultimately you are there to give them advice that suits their objectives and values,” she says.
“If your dealer group won’t allow you to recommend the product which best suits your client, be upfront with your client and tell them. Make sure you give your dealer group any feedback from both you and the client.”
Putt’s tip is to “expect the unexpected”.
“People you think would be really interested in ethical and responsible investment, who just are not, and people that would not appear to be, who are,” he says.
THE UPSIDE
Irrespective of whether they have an independent licence, or offer RI under the banner of a larger dealer group, all the specialist advisers report healthy growth from their RI client base.
Ethinvest has 60 per cent of its business in RI. Putt reports 20 per cent of his business is RI “and growing”. Private and Priority currently has between 5 to 10 per cent,“but we hope to increase this with more awareness”, de la Nougerede says.
Wood, from Green Associates, which only started to build specific RI portfolios for its clients last year, says RI currently represents a very small percentage of their business.
“However, we are looking to grow and develop marketing strategies around our RI portfolios,” she says.
McLeod says 30 to 40 per cent of her total client base receives RI-related advice but “this is growing each year, as 90 per cent of my new business is RI-related”.
Megan Lewis is marketing and communications director at the Responsible Investment Association of Australia (RIAA)
