Ahead of the publication of our Guide to Ethical Financial Advisers, Alex Blackburne speaks to Graham Walton, a specialist ethical financial adviser at Sheffield-based PHFS Wealth Management, who firstly describes how he got into the green and ethical industry.
I did a degree in accounting and finance, which I finished in 1995. I worked for Nationwide for two years in the management programme and then went into financial advice. I’ve been an IFA since 2003 and up until 2007, I was doing a lot of mortgages.
Suddenly I wasn’t doing as many so I was just twiddling my thumbs really. I just started reading – I read The Ecologist anyway – and I thought, “Why aren’t I doing more green and ethical investment advice?” And that’s just where I started advertising and started speaking to people about – it’s because I’m interested in it.
How has the industry changed since you started? Are more people asking for ethical financial advice than five years ago?
It’s probably a bit swayed with our company because if anyone phones up asking for financial advice, it tends to go through to the other directors. They deal with all the mainstream stuff. Unless a client is looking for green or ethical advice – or have asked for me specifically – I don’t deal with them. I’d say 90% of my business is now green and ethical investment; I deal with very few mainstream clients.
Do you have more clients nowadays?
I think I do. I was chatting with a colleague recently, and I said that I’ve probably had two new clients per month for the last six months of last year. That was all green and ethical, and tended to be referrals. The people I work with said they didn’t, and that they’d only had a couple of new people in that whole six month period. It’s probably only myself in the business that’s taking on new clients, but the other two directors aren’t really looking for new clients, whereas I am.
Tell me a bit about PHFS.
There are four financial advisers: two directors who do all the mainstream stuff, and they employ a salaried financial adviser and I own the green and ethical side of things. The business has been around since 1990 but none of the original directors are here anymore. I started here in 2003.
We’ve tried to be a bit deeper with our green and ethical stuff. We’ve got bike locks on the front of our office and I’ll cycle to appointments too.
I end up talking in meetings about bees, allotments and cycling, and then chat about the client’s pension at the end
We’ve got beehives as well. The company here bought in advance loads of honey to fund a beekeeping group at Hope Valley. We raised about £1,000 for that, and there’s loads of honey stuff around our office at the moment.
I run the beekeeping group so I teach everyone how to look after bees. I’ve only done that for three years so I’m a rubbish beekeeper, but I’m reading the books and just getting to grips with it. I’m also trying to grow my own vegetables.
I end up talking in meetings about bees, allotments and cycling, and then chat about the client’s pension at the end. Every six months, I send out updates on why I’ve chosen the funds I have done. Most people that are in green and ethical investment tend to be in my portfolio so it makes it a bit easier.
Why do you think people should consider ethical investment?
It’s more long-term as an investment style. You’re paying the true environmental cost of what you’re doing and you’re dealing with companies whose principles you agree with a bit more.
Do you think there is a compromise to be made between getting a return on your investment and ‘doing the right thing’ ethically?
I would say no, not at all. Using green and ethical funds there’s more risk because there’s less choice, but often the fund manager is a bit more passionate about their fund and a bit more involved in the choices they’re making. They have to justify those choices a lot more than a mainstream company would, because the people they’re attracting are asking a lot of questions. So I don’t think you’re compromising your returns at all by going into green and ethical.
With ethical investment, you’re paying the true environmental cost of what you’re doing and you’re dealing with companies whose principles you agree with a bit more
You can get your diversification by using a few different funds within your portfolio. The diversification isn’t going to be as good as you’re going to get with a mainstream fund, and sometimes the mainstream funds will return more and sometimes they’ll return less than an ethical portfolio. But you just don’t know when those timescales are going to be, and that’s what I’d say to most people.
What’s stopping ethical investment from seriously taking off?
It’s probably awareness. I don’t do a huge amount of advertising and I know a lot of the other green and ethical advisers don’t either. It tends to be word of mouth. And there’s not many of us out there. But as soon as you bump into someone you haven’t dealt with before, they say, “I’ve got a friend who wants to speak to you. They didn’t know there were any green and ethical advisers in the area.” So it’s probably our lack of advertising budget.
What are the biggest challenges for ethical investment in the next 12 months?
It’s just trying to fit within the mainstream financial regulations. We are restricted quite a lot. As soon as you call yourself an independent financial adviser, there’s a huge amount of investments that you can’t discuss. We can’t discuss unregulated investments with anyone who has under £250,000 to invest, which is not very many people. So the biggest challenge for the next year is just trying to work out the compliance and trying to see where that fits.
How will the retail distribution review (RDR) affect the ethical financial advice industry?
Overall it’s got to be better because of it. It’s encouraging people to ask questions and for advisers to be really clear about where people are investing their money. That works for us better as we’ve been charging fees for four years. It’s been good for us because we’ve picked up quite a lot of clients from HSBC who got rid of all their financial advisers recently.
If people don’t invest ethically, what is the biggest consequence for them?
Slowly, even the mainstream funds are going to have to be more green and ethical. But that’s just a case of waiting for the politics and policies around the world, and for all the different countries to catch up and impose those rules on those companies.
If you choose now to do green and ethical investment, it’s going to drag along all the mainstream funds to be more green and ethical, because they’ll see the value of it and see how much money it’s attracting.
Previous interviewees include:
- Jeremy Newbegin, of the Ethical Partnership (New Forest and Guernsey)
- Lee Smythe, of Smythe & Walter Chartered Financial Planning (London and Kent)
- Julian Parrott, of Ethical Futures (Edinburgh)
- Ash Rawal, of Lighthouse Impact Ltd (Derby, Derbyshire and the East Midlands)
- John Ditchfield, of Barchester Green
- Martin Stewart, of Stewart Investment Planning (Bristol)
- Ian Green, of Green Financial Advice (London)
- Christian Thal-Jantzen, of Bromige (Sussex)
- Richard Hunter, of Equity Invest (London)
- Helen Tandy, of Gaeia (Manchester)
- Lisa Hardman, of Investing Ethically (Norfolk)
- Scott Murray, of Virtuo Wealth (Edinburgh)
How Going Green Can Save A Company Money
What is going green?
Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.
The first step in going green
There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.
Making needed changes within the company
After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.
Reducing the common paper waste
Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.
Make money by spreading the word
Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.
5 Easy Things You Can Do to Make Your Home More Sustainable
Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.
1. Weather stripping
If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.
Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.
Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.
2. Programmable thermostats
Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.
Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!
3. Low-flow water hardware
With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.
Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.
Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.
4. Energy efficient light bulbs
An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.
New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.
5. Installing solar panels
Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.
Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.
From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!
These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.