The next issue of the Good Investment Review which is now available to download.
Pennine Wealth Solutions are proud to be sponsors of the Good Investment Review, and have written the following article as part of the review.
Skirting around ESG Investing
For 30 years or more, most IFAs have skirted around the subject of ESG (Ethical, Social and Governance) investing. Probably hoping it would just wither and die. Why is this.?
It’s a challenge being an IFA, full stop. They are drowning in regulation. ESG just means more research, more questions that need answering, and what for, when the majority of clients just want to make money. When asked in informal surveys, IFAs stated that not more than 10% of their clients had even the vaguest interest.
Unfortunately for them, and their clients, most IFAs are behind the times. Even before Coronavirus, client’s views were changing rapidly. Younger IFAs seemed more open to the new way of thinking. Us oldies were oblivious to the changing perceptions of investors young and old.
Model Portfolio Manager, Pennine Wealth Solutions (PWS) created and launched their POSITIVE PENNINE PORTFOLIO RANGE in 2016. We very quickly needed to know that our suspicions were correct. We believed that a substantial portion of investors wanted ESG solutions.
The Survey
In 2017 we arranged a retail client survey. We supported 3 experienced IFAs to survey their current clients. The results were amazing.
The Main Results
The major finding was that 76% of all survey responders wanted some or all of their investments in ESG. Even assuming all non-responders were not interested, the figure supporting ESG still sits at 43.1% in favour. An interest 4 times greater than IFAs own estimates.
A Bit More Detail
We surveyed 167 current IFA investor clients, from 3 IFAs; (2 male and 1 female). The survey was done by post, and online. The postal response rate was 5x higher; than the online response rate. The investors were aged 33-81 years old with the average being 60.8 years.
Overall, we received 72 returns. A response from 43.1%. I am not a survey expert, but believe this is a very high response rate. To investors the subject must be EMOTIVE. Of the 72 returns, 40 were from males and 32 from females.
We invited respondents to add additional comments. We collated these. Investors have little trust in big business. Corporate greed, poor environmental policies, shady tax arrangements, shareholders needs paramount, were just some of the themes.
Most of all, investors indicated that they didn’t know where to go to ESG invest. They didn’t realise their regular IFA could help. It had never been previously discussed. Our conclusion was that in 2017, the IFAs were part of the problem, not the solution.
What Had PWS Done About This
We immediately set about training IFAs from scratch. Numerous sessions were put together featuring both ourselves, and leading guest speakers. We have to thank George Latham of WHEB, Peter Michaelis of Liontrust, Sean Fisher at PWS, David Connor from the 2030 HUB, and especially John Fleetwood of Square Mile.
We run Investment Seminars every 13 weeks. These enable clients to listen directly to the experts. Over 400 attendees per year. These investors are the clients of our supporting IFAs. An IFA cannot utilise our portfolios till they have been trained by us.
We created a new specialist website, with reams of supporting information for interested parties. We utilise digital marketing techniques to attract traffic to this new website. We created portfolio fact sheets that include qualitive data as well as the usual financial stuff. We have even sponsored some well-known local business awards to further strengthen our regional message.
Our IFA supporters are utilising fact finds that include more questions, to gauge the clients ESG views. Our IFAs understand how Impact Investing differs from general ESG constituents. We’ve even become a ‘GOOD EGG’, as recognised by the people from Good with Money.
The Results
Although a small Model Manager when compared to some of our competition, Pennine Wealth Solutions has a big kick. The POSITIVE PORTFOLIOS have a very strong 4-year track record. They have loyal investor and IFA supporters, and the numbers of both are growing quickly.
Visit www.positivepennine.co.uk
If you find our article interesting and would like read more of the Good Investment Review, you can download the full document here
If you a Financial Adviser and would like to know more about PWS and our range of Positive Pennine Portfolios you can visit our website www.penninewealthsolutiosn.co.uk or contact our Business Development Manager Sean Fisher on 0800 161 5052.
Pennine Wealth Solutions LLP is authorised and regulated by the Financial Conduct Authority and is only available through authorised Financial Advisers.
Investors should remember that the value of investments, and the income from them, can go down as well as up. Investors may not recover what they invest. Past performance is no guarantee of future results. Any mention of a specific security should not be interpreted as a solicitation to buy or sell a specific security.