Mindful Money co-chief executive Kate Vennell says ethical investing is no longer a niche, with three-quarters of New Zealanders wanting responsible investments and a new generation of clients likely to demand more from their advisers.

Financial advisers who fail to understand their clients' ethical investment preferences risk losing business as wealth passes to a more demanding generation of investors, Mindful Money co-chief executive Kate Vennell says.

Speaking to GRTV following Mindful Money's Ethical and Impact Investment Awards, Vennell says responsible investing represents significant unmet demand rather than a specialist niche.

“We know that three-quarters of Kiwis want responsible investing,” she says, adding Mindful Money's surveys show the figure rises to 81% among women.

“To me, it's actually an untapped demand that's huge.”

Vennell says some advisers may previously have believed they could provide their standard investment offering without exploring clients' ethical preferences in depth. But she expects that to become increasingly difficult.

The looming intergenerational wealth transfer will accelerate the change as younger beneficiaries become more assertive about where their money is invested.

“If they don't get that, the risk of keeping that client, especially if that client has come to them through inheritance, rises.”

Vennell says changes within the advice profession are already helping. Younger advisers are entering the industry following the departure of many older advisers and she sees greater commitment to continuous learning and understanding clients' wider needs.

She argues considering a client's values is also part of providing suitable advice under the Code of Professional Conduct.

“Your advice needs to be suitable for the client. That means it needs to have some alignment with their values.”

The investment sector itself is also changing. Vennell says more mainstream funds are investing for positive outcomes rather than concentrating solely on avoiding harmful investments.

That trend was reflected in two new categories at this year's Mindful Money awards. Pathfinder won the inaugural Best Integration of Positive Outcomes award, with Generate highly commended. Mindful Money's published results say the category recognises increasing investment by mainstream KiwiSaver and managed funds into positive real-world outcomes.

Vennell says advisers don't need to specialise in ethical investment to respond.

“There are lots of resources for advisers, and I think a good advice firm can have a range of options.”

Watch the full GRTV interview with Kate Vennell for her views on the changing advice profession, intergenerational wealth, ethical investment and the growing focus on investing for positive outcomes.