Top Tips for getting in to SRI

Growing Demand. Interest in green and ethical issues is increasing dramatically. SRI is part of a societal shift which is set to continue over the longer term as a result of a diverse range of pressures. This presents significant new opportunities for advisers. Ask every client you meet if they are interested in green and ethical investment and review existing clients as views are changing fast in this area.

•Performance. SRI funds often perform differently from other funds.  Not better, not worse, but differently.  This is because they often invest differently from other funds.  SRI options that perform almost exactly in line with mainstream benchmarks or non SRI funds probably invest very similarly to other funds.  This may or may not be what a client wants.

Fact Finding. Ask sufficient fact-find questions to work out what kind of SRI client you are dealing with. Many people favour positive, forward looking  investments that seek out opportunities by focusing on social and environmental issues alongside financial criteria. Some clients want to put their ethical values first. The SRI market caters for both points of view. IFAs should not be lulled into thinking the latter group represents the whole market.  They are not.  Understanding that different investors need aims and opinions helps open up new opportunities.

Meeting SRI aims. Most of the time there are investment options that will suit your clients needs.  Sometimes investors may have to compromise.  Investors should be made aware that investing part of your money ethically or into greener companies is better than not at all. It is often worth alerting clients so this possibility early in the advice process.  It is also worth being aware of which fund managers carry out extensive engagement activity as ‘engagement only’ funds are often useful alternatives.

Mix and Match. Many green and ethical investors also invest in non-SRI funds. This reflects normal life. Even the most committed ethical enthusiast rarely buys only ‘ethical’ products in their everyday lives and most of the worlds environmental enthusiasts drive cars. This is not the contradiction it may appear to be – it is pragmatism.

Meeting financial goals. Explain to clients that their SRI aims need to sit comfortably alongside standard financial considerations if they are to achieve their financial goals. This may mean balancing different SRI styles alongside each other and non SRI styles. For most clients this can work well.

Help spread the word. If a fund you are interested in is not on the platform or wraps you use – ask for it to be put on! Platforms respond to demand.

Join in. Keep an eye on sites such as this to keep informed about SRI. Be part of National Ethical Investment Week.

Publicise your work. List ethical investment as one of your areas of expertise on unbiased.co.uk and write articles in local publications about it.

Be yourself! You do not have to share your clients opinions in order to offer sound advice.

 

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.