GREEN AND ETHICAL INVESTMENT FOR ADVISERS: AN OVERVIEW

For financial advisers and investment consultants, advising on green and ethical investment makes sense as part of a modern financial advice service.

Growing consumer interest

“As consumers become more knowledgeable about their finances and the environmental impact of their choices there has never been a greater need for the provision of high quality independent advice about green and ethical investment — AIFA Director General Chris Cummings

People are increasingly concerned about the social and environmental impact of their everyday choices. The number of people buying fair trade goods, to take one example, continues to grow, despite the downturn. Similarly, more people want to make money and make a difference. Could advising on green and ethical investments help you support your clients?

Weathering the storm

IMA quarterly statistics in 2009 illustrated that despite market upheaval green and ethical investors remained loyal to their funds suggesting that green and ethical investors are ‘stickier’ as they are typically long-term investors who look beyond short-term market fluctuations and want to benefit from sustainable wealth creation even in difficult markets. Sustainable investments accounted for 8% of the European HNWIs’ portfolios at the end of 2007. Eurosif predicts that this figure will grow, even taking into account the possibility of turbulent markets.

According to EIRIS, as of 31 Dec 2009 there was approximately £9.5 billion invested in the UK's green and ethical retail funds - up from £2.4 billion ten years ago.

More to offer clients

There is already ample evidence that green and ethical investments need not underperform. A well-managed fund can perform as well as other investments.

Major social, economic and environmental trends mean that green and ethical investments have potential for excellent future performance. Increasing your knowledge of green and ethical investments can help you support your clients, and allow them to take advantage of this growing market.

See our Case Studies to see how other financial advisers are helping their clients add a green or ethical investment to their portfolio.

See other Resources for Financial Advisers or find out how to Get Involved with National Ethical Investment Week.