Misconceptions remain around RI investment pricing

One of the biggest misconceptions in responsible investing is that products are more expensive than traditional investment products, according to a panel.

Speaking at an Evergreen webinar, Ethical Invest Group founder, Alexandra Brown, said in some cases RI products were more expensive, but that there were more products coming to market that were competitively priced.

“These managers are also competing on fees and price as well and I feel that is helping to bring the cost down,” said Brown.

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“There are a lot more exchange traded funds (ETFs) and lower fee options as well that you could incorporate in a portfolio to help bring that overall cost down.”

Karen McLeod, financial planner at Ethical Investment Advisers, added it was important for advisers to have discussions with their clients about RI fees.

“One of my colleagues puts it this way: ‘would you prefer to pay 0.2% more in fees for these outcomes or would you not?’

“So then the client can make that decision if they want that particular actively-managed fund, they can choose that, if they'd prefer to go with a more passively-managed ETF that has less engagement, they can go with that fund.”

One option was to utilise lower cost passive RI investments in a client’s core portfolio with more expensive actively-managed and higher-engagement funds as a satellite investment.




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