Getting started in responsible investing

Want to get started in offering advice on responsible investing for your clients?

Being informed and confident to offer the education that clients may need is an important aspect of offering responsible investing.

Australian Unity’s Head of Intermediated Markets, Adam Kirk, said some of the questions from clients can be quite sophisticated, however advisers shouldn’t feel the pressure to know all the answers, rather just how to source them. Today, this can still be a challenge.

“Investors need their adviser to know where to source information, but I am not sure advisers know where to start or what they need to know. Advisers are often looking for a packaged solution.”

Growth in product has certainly created more choice, with more vehicles such as ETFs and managed portfolios fuelling greater competition. However, to-date, experts say this choice has only highlighted the lack of consistency in how responsible investing is described.

“Investment managers have done a great job of confusing everyone,” said Lonsec’s Head of Sustainable Research, Tony Adams. “Part of it is deliberate on the part of investment managers, as they want to differentiate themselves.”

Ratings houses and data providers are bridging this gap by providing more detailed reporting and ratings specifically targeted at responsible investing. The Responsible Investment Association Australasia (RIAA) is also working hard to build the responsible investing community, to open up discussions and create resource networks for participants in this sector.

Financial advisers who have pioneered responsible investing in Australia say the information provided on the Ethical Advice Co-op (www.ethicaladviserscoop.org) is a good place to start. It also offers ethical ratings of ethical investment funds and super.

“It’s a good resource for all advisers and investors to consider the varying ethical screening in products,” said Joint Director and Financial Adviser Louise Edkins of Ethical Investment Advisers.

Interested in learning more?

Download whitepaper: “Platforms and responsible investing: A new outlook”