Advisers need more transparency to promote ESG
Limited transparency and disclosure in the Australian superannuation space is preventing advisers from properly advising on ethical and environment, social and governance (ESG) investment considerations, according to Australian Ethical Investment.
Head of client relationships at Australian Ethical, Leah Willis, said the while nine in 10 Australians would expect their superannuation or other investments to be invested responsible and ethically, a lack of transparency around the super industry prevents Australians from really knowing what they are invested in, and what activities they are funding.
“Ethical and responsible investing presents advisers with a great opportunity to form deeper, more meaningful relationships with their clients by matching them with investments that align with their personal values,” said Willis.
“And while a growing number of Australians are actively seeking Australian Ethical out as having the highest ethical conviction of any responsible fund, challenges in the sector include limited knowledge, confusion, and a lack of advice.”
Willis said the various labels attributed to ethical funds was often confusing for investors, and it was up to advisers to demystify and simplify ethical investing, but to do so, advisers needed to be asking funds directly about their investment process.
“As we see the interest in responsible and ethical investment continue to grow, access to comprehensive investment information, philosophies, and screens should be readily available for the adviser community to help clients realise their financial goals,” Willis said.
AUTHOR
Anastasia Santoreneos
Recommended for you
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
Amid the current financial adviser shortage, advice firm Link Wealth is looking to expand its financial literacy program for high school students across the country.
TAL Risk Academy has updated its range of ethics courses to help financial advisers meet their CPD requirements following adviser feedback, including interpreting FSCP determinations.
