Ethical investing leads to more loyal advice clients
Financial advisers can lower their costs and create more loyal clients by catering to environmental, social and governance (ESG) concerns, according to Premium Wealth Solutions general manager Paul Harding-Davis.
Speaking at the Responsible Investment Association Australasia conference, Harding-Davis said responsible investors were known to stay with their adviser for longer and were more likely to refer other clients to the adviser.
Financial advisers can lower their client acquisition costs by catering to responsible investment clients, which was an important factor in a fee for service environment, he said.
Responsible investors also differ in their reaction to past performance, with responsible funds getting more inflows compared to other investors after good performance outcomes, Harding-Davis said.
If the subject is approached properly, 60 per cent of Australians want to have some of their money invested in responsible investment companies, he said.
The opportunities in creating a network of ethical investors are bigger than the financial rewards, Harding-Davis added.
Director of Ethinvest Ross Knowles told delegates that the more values an adviser shares with clients, the better their relationship is going to be.
Advisers have to be on the same page with clients on ethical investing, he said.
Knowles suggested that clients were also less likely to leave an ethical investment adviser during a financial crisis.
Advisers will be more successful with clients the further along they move on ESG issues, Knowles said.
Recommended for you
A quarter of advisers who commenced on the FAR within the last two years have already switched licensees or practices, adding validity to practice owners’ professional year (PY) concerns.
Integrated wealth and financial services group Rethink has launched a financial planning arm called Rethink Wealth to expand beyond property investing and into holistic wealth management.
While adviser numbers continue to slowly creep back up, the latest Wealth Data analysis reveals they would actually be in the green for the calendar year if it weren’t for so many losses in the limited advice space.
Iress has appointed a chief AI officer to spearhead the fintech’s strategic focus on AI, with chief executive Marcus Price describing how the technology opens the doors to a “new frontier for wealth advice”.
