[The Wrap] Sorry guys, you can't (or shouldn't) be ignoring RI
Advisers need to be talking to clients about responsible investment options; rather than just putting the questions into the too hard basket.
Friday, November 16th 2018, 5:55PM
John Berry, Pathfinder
In the past week I’ve heard a few RI presentations…it’s a highly topical area for fund managers and advisers right now.
What is interesting is the divergence between how tightly managers are embracing RI/ESG practices and the seemingly stand-off approach taken by many advisers.
There’s a presentation Harbour Asset Management does which shows, generally, stocks which score highly on its Corporate Behaviour scorecard also produce better investment returns than those with low scores.
I’ve heard the presentation twice now and it is compelling, especially when it’s delivered with a bit of passion, like CEO Andrew Bascand did at SiFA on Sunday.
Advisers, though, seem to be wary. When the question came up at the recent SiFA conference one theme was if you ask a client about RI they all come up with different ideas of what they don’t want to invest it.
The corollary is it’s too hard to match clients up with suitable investments.
Therefore, simply don’t ask.
However, Pathfinder director, and Code Working Group member, John Berry says advisers should ask clients about RI.
His personal view is, and it’s one I agree with, is that under "know your client and putting your clients’ interests first", so there is an obligation to bring the subject up.
But the industry shouldn’t go so far as embedding it into the Code of Professional Conduct.
Considering the changes in the funds management world and the increasing awareness of issue, like single-use plastic bags and recycling, then advisers do have to be asking these questions.
To throw them into the too-hard basket isn’t the right thing to do and nor does it fit with creating a profession. [Comments welcomed!]
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