Adviser SRI FAQs & links

Q. Where do I go for a list of relevant SRI fund options for my client?

A list of fund options is available via the SRI Services Fund EcoMarket tool.  Advisers input the SRI Style/s their client is interested in,  product areas of interest and investment sectors that may be of interest in order to generate a fund ‘shortlist’.

Q. How do I work out what SRI Style or Styles may be suitable for my client?

There are two options within the Fund EcoMarket tool. Direct investors to the SRI StyleFinder button on the home page of the SRI Services or the ‘Questionnaire’ button on the Fund EcoMarket site – or you can use the pdf version of these questions from the Fund EcoMarket site .  Once the questionnaire has been completed online you will be able to  identify the SRI styles that best suit a potential investor.   Clients should select those that most closely apply to their personal opinions. This will generate  a list of the three best fit styles.  It is generally a good idea to research all the styles that are potentially of interest in order to caste the ‘investment options net’ as widely as possible.

Q Can I download the fact find questionnaire?

Completing the questionnaire online means relevant SRI Styles are identified instantly however if this is impossible there is a (tick box) factfind questionnaire pdf available on the Fund EcoMarket homepage.  Clients can be directed to the client ‘SRI StyleFinder’ microsite to read up on how this system works.

Q. Where can I go for more SRI facts & figures?

The UKSIF website http://www.uksif.org covers a range of issues relating to the SRI market (mainly in the UK) .  Useful international information can be found on www.eurosif.org .  Also see http://www.unpri.org for information about the United Nations Principles for Responsible Investment, an institutional initiative. EIRIS supply information relating to the size of the UK ethical investment market.

Q. Where can I go for help on ethical issues and companies?

Research agency EIRIS offers a wide range of information and research on ethical issues for investors www.eiris.org as well as publications and blog pages.  They also run a service for individual investors www.yourethicalmoney.org .  www.Ethical Screening.com runs research services for fund managers and advisers.  http://www.corporateregister.com also offers a substantial on line bank of company CSR information.”  We recommend advisers (and other users) check the information they are reading is up to date and fund specific prior to offering advice or forming opinions.  Nothing we publish should be interpreted as ‘advice’ of any kind!

“Q. Where can I go for help on ethical issues and companies?

Research agency EIRIS offers a wide range of information and research on ethical issues for investors www.eiris.org . Their publications and blog pages are a good resource.  They also run a service for individual investors www.yourethicalmoney.org .  www.Ethical Screening.co.uk also runs research services for fund managers and advisers.  www.Corporate Register .com also offers a substantial on line bank of company CSR information.”

Q. Can clients be ‘a bit ethical’?

Yes, most definitely.  Many people invest some of their money in SRI or ethical funds and the rest elsewhere.  Some like to review existing investments when they find out about SRI, others do not.  This is akin to people buying free range or organic products some, but not all of the time.  This is very common amongst existing ‘real life’ SRI  investors.

Q. Where do I find out more about what is happening in renewable energy?

There are many sources on-line. The current issues the Department for Energy and Climate Change are consulting on are available online..  A favourite publication of mine is ‘Green Futures’ – by  Forum for the Future.

Q. How do I find out about making my home greener so I can talk about it with my clients?

The Energy Saving Trust is a customer facing organisation tasked with helping people to save energy.

Q. Where do I find out specifically which issues ethical funds screen for?

There is a research site for consumers run by leading SRI research provider EIRIS www.yourethicalmoney.org  as well as a range of services for fund managers and advisers. An alternative site is Ethical Screening www.ethicalscreening.co.uk who also offer a range of bespoke services.  Product and fund research is also available from from Synaptic Research  (part of Capita) who offer a range of comprehenive tools for financial advisers with includes an option to search for SRI/ethical funds and interrogate their database for both SRI and financial informtion. 

Q. Is there an IFA group I can join to get to know more about this area?

The IFA side of the SRI industry body UKSIF can be found via www.ethicalinvestment.org.uk . Also see http://www.neiw.org/ for information about National Ethical Investment Week.

Q Why is there no universal ethical or green investment sector?

Because funds are too diverse both in terms of where they invest and what environmental, social and ethical issues they cover. They are therefore not directly comparable.  Financial Express do however have a system that classifies some funds as ‘ethical’ and other systems offer ethical flags.  These do not necessarily include all SRI options or areas that may be of interest but can be a useful stating point.

Q. What is the difference between SRI issues and themes?

They are similar. Themed SRI funds tend to focus on a cluster of often connected issues.

Q. Does it make a difference whether or not a fund is supported by an in-house research team?

Most fund managers use external agencies for SRI research as covering all companies on all issues is hugely expensive. As such there are no hard and fast rules. Employing a substantial team of in house experts clearly demonstrates a commitment to SRI and the opportunity to develop unique strategies.  Unsurprisingly newer and smaller players tend to rely more heavily on external agencies  although employing an in-house expert or two  is becoming more common.

Q. Am I ‘required’ to offer SRI advice?

Not yet – unless you are aiming to acheive the best practice adviser ISO standard ISO22222 (BS 8453) which requires advisers to ask an SRI fact find question.  You are however of course expected to offer appropriate advice and to know your customer.   As offering SRI is now firmly established as ‘best practice’ we recommend all advisers include an SRI fact find question in their client questionnaire and integrate it into the advice process.  Further information on the Adviser ISO is available from Standards International.

Q. Why should I offer SRI? What’s in it for me?

The public is increasingly interested in green and ethical issues. Business is changing fast – with new technologies being developed – and many existing companies raising standards across a number of key areas. To date the retail investment community has neither risen to the challenges nor maximised the opportunities this presents.

Anecdotal evidence from IFAs also suggests that this area is great for building strong long term relations with clients, for gaining referrals and for building trust.

One of the main reasons people say they invest in SRI funds is because they want to ‘make a difference’ – the other being because they want to make money!   What could be a better way for an IFA to ‘add value’ to a client than offering well informed advice that will encourage better run businesses – whilst finding appropriate investment strategies?

Q. How do SRI funds perform?

There is no simple answer to this. See Top Tips on SRI performance. In brief: Some funds do better than others. Some do better in certain market conditions markets. And as ever – a spread of investments is prudent.

Over the years headlines have variously indicated that SRI/green or ethical investments can be both star performers and poor underperformers. This is no different from any other group of investments. The most important issue to remember is that these funds are so diverse that they cannot be compared or generalised about.  Example issues to look out for include:

• Where the fund invests – company size split, geographic areas, asset types

• What sectors is the fund overweight/underweight in?

• What are the macro trends that are likely to drive performance ?

Fund specific performance information is also often available from your regular sources eg Trustnet http://www.trustnet.com/Investments/EthicalFunds.aspx

For more on this topic see www.preventablesurprises.com

Q. Should I only promote SRI to green or ethically minded investors? Or is it OK to invest in SRI funds just because the performance is good?

As long as a client understands where they are investing and has sufficient information about how a fund operates in order to make an informed decision it does not matter what motivates a person to invest in a green or ethical fund. Investor opinions and motivations will always be diverse.

Q.  Where can I go for additional information on engagement and voting activity untaken by fund managers?

The first place it look is normally the fund manager’s website, however there are a range of other excellent sources available.  Fund managers responses to the Stewardship Code can be found on the FRC site and checking out who is (an is not) a member of the UN PRI can also be interesting as both indicate an interest is encouraging higher standards.    You may also like to see who is active in this area’ by looking at the UKSIF website and following the links to the various industry initiatives that may be of interest to your clients.

Q. Where can I find research on impact investment?

There are many sources most of useful information on impact investment.  One study is the Nesta 2011 survey.

This information is for use by UK professional financial advisers only. SRI Services is not authorised to give investment advice, if you are an individual investor you can find an IFA on www.unbiased.co.uk. The information on this site does not in any way constitute advice or recommendation. The information and tools are intended to compliment, not replace existing adviser information sources. Investment decisions should not be based on the information contained on this site alone. Please confirm fund information with fund managers. We cannot be held in responsible for advice given as a result of using this site and are not responsible for the content of sites linked to this service, we do however of course take every effort to ensure the content of this site is as accurate as possible at time of publication.