29th July 2013

sriServices: Upgrade to ethical!

Some advisers have welcomed the growing interest in ‘Sustainable and Responsible Investment’ as a logical response to changing times.  Others have been less keen and may have been tempted to sideline clients’ interest in ethical investment.  Like it or not however individual investors are increasingly aware of the importance of green and ethical issues and often welcome the chance to include it as part of their investment strategy.   

Issues of this kind are increasingly taking centre stage for business as challenges such as resource scarcity, climate change and human rights become ever more pressing.  Legislators and regulators may be struggling to keep up – but in many cases institutional investors are surprisingly expert and often have significant resources dedicated to understanding the business implications of such challenges - and their potential impact on shareholder value.  The options they offer therefore are well thought through but can be complex - and of course different offerings suit different clients.

Yet this area is well worth investigating.  Building clients views on ethical, social and environmental issues into an investment strategy can help make the advice process more personalised and holistic.   It can help develop closer client relationships also, as clients feel more engaged in investment decision making when their portfolios reflect their personal views as well as their investment goals.  Ethical investors have also proven themselves to be more loyal than other investors.  

To help advisers unlock the potential of this market, Julia Dreblow, former SRI Marketing Manager at Friends Provident - and former UKSIF director - has set up her own independent, on-line business ‘sriServices.co.uk’.

The sriServices website includes a wide range of training and support materials that focus on the green and ethical aspects of investing.  The site offers advisers and paraplanners the opportunity to gem up on this area online for free.  It offers a unique and comprehensive range of unbiased, independent information and tools which are entirely designed for the benefit of the advisory community.  The aim of the information is to help users to better understand the most important differentiators of Sustainable and Responsible Investment (SRI) options – and the main reason why clients are generally interested in them – namely, their approach to ethical, social and/or environmental issues. 

The sriServices site includes the following:

• The ‘About SRI’ area offers generic SRI, green and ethical investment training for financial services professionals.  It introduces the market, explains the issues that different funds consider - and the diverse approaches they offer.  It also introduces the range of client attitudes and fund styles that you may come across. 
• The ‘Advising on SRI’ area offers support and suggestions relating to the advice process. These are based on approaching 20 years of experience working with advisers in this area.  The area includes regulatory and best practice information, a suggested advice process flowchart, top tips and FAQ’s.
• The ‘Literature’ page in the ‘Advising on SRI’ area - which is also available via the Panacea Adviser Ethical Zone – lists supporting material such as guides and videos.

The most practical area of the site is the innovative, new ‘Fund EcoMarket’ database tool.  Its purpose is to help match clients’ ethical aims to what is available from fund managers today - and to rapidly generate a list of relevant SRI fund options. This free tool does this by clustering investment options into what we refer to as ‘SRI Styles’.  These are based on funds’ green or ethical characteristics and goals and can be matched to clients’ ethical aims via the integrated, ‘SRI StyleFinder’ client fact find questionnaire.   

The Fund EcoMarket database is for industry professionals only.  It has a brief login process to deter individual investors from using it - as sriServices are not authorised to advise clients.   There is however a ‘StyleFinder’ client microsite that clients can be directed towards, if you prefer your clients to complete fact finds in their own time.  The client site also introduces the main SRI Styles, however clients cannot generate a list of funds, as that information is only available to advisers via the full Fund EcoMarket database.  The StyleFinder SRI fact find questionnaire generates a brief report which lists the SRI Styles that best suit the client’s personal views.  This can be shared with an adviser so they can skip this part of the Fund EcoMarket tool. 

With the help of this tool, it should take no more than a few minutes to pull together a list of relevant fund options from across the entire SRI market.  This list can then form the starting point for your regular fund research process.

Fund EcoMarket SRI Database outline:

• Comprehensive listing of 400+ retail SRI/ethical screened, themed and engagement options
• Range of product areas - Life, Pension, OEIC and IT
• Funds listed by investment area / asset type
• Funds segmented into SRI/ethical investment Styles (selected by ‘tick box’ or ‘fact find’ options)
• Generates a full list of relevant funds which are product, asset type and SRI Style specific
• Adviser selects which funds to offer to their client
• Selected fund options can be saved or printed to a brief client report - for audit trail purposes
• Separate client microsite offering basic details plus ‘StyleFinder’ fact find questionnaire

Upgrading your business to ‘ethical’ - by building it into your research and advice processes - is very much part of future proofing an advisory business.   It is consistent with regulatory requirements to offer unbiased advice and is also recognised as best practice in the Adviser ISO.  In this day and age the risk of offering such options is minimal, as we are all used to hearing green and ethical messaging, yet overlooking it could leave clients feeling distinctly underwhelmed.   

So with holiday’s at the forefront of so many of our minds … there may be no time like the present to upgrade to ethical.  You may even like to then start planning what you might do for National Ethical Investment Week 2013 - which will be taking place in mid October as usual!

For further information please see the links below or contact Julia@sriServices.co.uk.  Feedback and questions are always welcome!

Links:

• sriServices home page - http://www.sriservices.co.uk/
  • Fund EcoMarket Tool access -  http://www.sriservices.co.uk/fund-ecomarket-tool-overview
  • SRI Styles directory  - http://www.sriservices.co.uk/fund-ecomarket-tool-overview/fund-ecostyles
  • Literature directory   http://www.sriservices.co.uk/advising-on-sri/adviser-support-literature
  • Client microsite - http://stylefinder.fundecomarket.co.uk
  • Panacea Adviser Ethical Zone - http://www.panaceaadviser.com/main/p4/16,0,0/ethical+zone.htm

By Julia Dreblow, Founder sriServices

July 2013

Ethical/ESG