Top Tips for using the SRI Advice Roadmap

Top Tips for using the advice roadmap

  • There is no single right way to offer advice on SRI, the following three step process has been designed to help advisers to offer advice in a straight forward fashion without having to research lots of possible fund options that are likely to be irrelevant.  The three step process is:
    • Step 1 Initial Fact Find Question
    • Step 2 Identify relevant SRI Styles
    • Step 3 Combine information to identify fund options
  • This advice roadmap is intended for use with our Fund EcoMarket tool which is currently under development (due for release Q3 2011)
  • You may find your clients have a wide range of views. You should seek to integrate their views into your investment recommendations as much as possible – and be careful not to let your own view and opinions seep in!  Opinions on green and ethical issues vary greatly and clients are most likely to be delighted with the advice they receive if it reflects their personal views.
  • To introduce the concept of SRI to your clients prepare an ‘elevator speech‘.  Different advisers have different ideas regarding what works but you may like to say something like environmental and social issues are becoming more and more important to a lot of companies these days – do you have any views on this kind of thing that we should thinking about when looking at where you are going to invest?’
  • Things to be aware of about fund classifications:
    • Some funds could fit into more than one segment as funds many have features in common with more than one style.  (We do not do this however, this is dealt with at the output stage.)
    •  SRI approaches within a given SRI Style may vary greatly. (You need to see individual fund details for full information)
    • Investment strategies vary between and within each SRI Style
    • There are many diverse SRI approaches taken by fund managers.
    • Do not expect funds that have themed approaches to have views on ‘ethical’ issues.  If a fund does not say it specifically excludes something it may well include it!
  • Clients may require additional research to be carried out if they have specific needs. Sources of additional information include www.yourethicalmoney.org, Ethical Screening and EIRiS .
  • Product options that will be available on Fund EcoMarket are: Life, Pension, Unit Trust/OEIC, Investment Trust and selective SICAV/offshore and DFMs.
  • Investors’ views evolve as they go through the advice process – or over time.
  • Finding investment options:
    • There are around 20 different IA/ABI sectors that offer SRI options today:
    • Most investment styles now offer SRI options
    • SRI funds are available through life, pension, Unit Trust/OEIC product wrappers through a range of several hundred primary funds and sub funds.
    • Fund risk profiles vary greatly – even when funds have similar SRI styles
  • Once a fund list has been generated we recommend:
    • The adviser should carry out their regular financial research
    • If applicable – decide what percentage of the client’s portfolio is to be directed towards SRI funds.
    • If appropriate – discuss possible combinations of EcoStyles that might help create a portfolio that meets a financial as well as their green/ethical needs.

 

 

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