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.
“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.
Recommended for you
In the latest Meet the Manager profile, Money Management speaks with Michael Skinner, founder and managing director at Blackwattle Investment Partners.
Perpetual has seen AUM rise 6 per cent in the last quarter but the departure of a longstanding JOHCM fund manager led to outflows of $2.2 billion from his strategy.
Global fixed income fund Bentham Global Opportunities has been added to several major platforms, enabling it to be accessed more easily by financial advisers.
Following yesterday’s news about First Sentier Investors closing four investment teams, a second global asset manager has announced it is closing its only dedicated Australian fund.
