Socially responsible investing has stood out as a big winner in the new choice of fund environment, despite only a small fraction of planners currently providing socially responsible investment (SRI) advice.
Australian Ethical Investment (AEI) superannuation manager Richard Whelan said AEI had seen “quite an influx” of members since the introduction of choice.
“Our average was normally around 33 new members a week, but since choice has come in it’s gone up to about 45. I can’t relate all of that to choice, but it’s an educated guess that to get that sudden increase from the 1st of July this year would have to be put down to choice,” he said.
But while SRI is gaining momentum, with funds under management in ethical investments reaching $7.67 billion this year, a 70 per cent jump since 2004, EIA has identified just 100 specialist SRI planners, from a total of around 16,000 planners currently practising in Australia.
AMP Financial Planning managing director Greg Kirk attributed the low numbers to the comparative newness of the field and a lack of in-depth research available on SRI products.
Kirk said his dealer group had increased its focus on SRI, seeing it as a growing market.
“We’re starting to see significant out-performance in the class and that’s translating to consumer appetite for this type of investment,” he said.
Large superannuation funds like AMP have led the charge into SRIs, accounting for almost two-thirds of total SRI funds under management.
EIA chief executive Louise O’Halloran said an EIA survey of 927 consumers found younger members of government or industry superannuation funds were the groups most likely to consider SRI superannuation, however, this was typically on the proviso that it was offered by their current fund.
Older employees who use a financial planner to guide their investment choices are the least likely group to be interested in SRIs, the survey found.
Interest from fund members was generally mixed, with 22 per cent confirming they would use a SRI super fund, and 27 per cent saying they would favourably consider SRI funds. A further 42 per cent said they would consider SRI funds on the basis of their merits. Nine per cent said they would not invest in a SRI fund.
