Earlier this week, FT Adviser reported that IFAs ‘turn down’ ethical investments. Simon Leadbetter investigates whether the issue is investor demand, adviser expertise, funds available or a lack of understanding for both parties.
On Wednesday, one of the financial adviser trade magazines, FT Adviser, reported the assessment of Anna Sofat, managing director of London-based Addidi Wealth. She said, “A lot of people do not want their money invested in unethical industries such as armaments, tobacco, blood diamonds and so on.
“If socially responsible investment is never discussed, people will not realise that there are solutions to their ethical concerns. Some financial advisers say that ethical investments have underperformed over the last few years, but so have the majority of actively managed funds.”
Blue & Green Tomorrow’s own internal research of IFA Fact Find documents (a short information-gathering survey mandated by law when advising clients to ensure that the advice is the best available from all information given) showed that many IFAs leave the ethical investment question to the end, when much of the guided discovery of financial advice has already been given.
It is surprising that when the Financial Services Authority itself states that, “When assessing a customer’s needs you should make sure you consider their hopes and aspirations plus any beliefs” , advisers give such a low priority to what will be some of the most profoundly held beliefs of the advised, whether on moral or religious grounds.
One of the issues is the word ‘ethical’, which has religious or moral overtones in the highly secular, some would say amoral, environment of investment. Socially responsible or sustainable do not carry alienating overtones.
Many people’s values are less about religion than a belief in what is right and wrong. Whether you are, in order of global adherents, Christian, Muslim, non-religious, Hindu, Buddhist, Shinto, Sikh, Jewish, et al., most people believe that pollution and killing or exploiting people (especially children) is wrong, and they would not collude in such activities directly.
We’re fairly confident that there is no religious text that says, “You shall not sin… unless it compromises your rate of return” – and the non-religious have equally strong convictions, too.
Unless ‘expert’ financial advisers spell out the direct connection between the investments their clients make and real world activities (e.g., armaments, tobacco, blood diamonds), or even attempt to get some sense of the client’s values or beliefs in regard to these activities, then they are self-evidently failing in their duty to provide the most appropriate advice.
Again, our own research suggests that while only 8% of the market would switch to ethical or environmental investment options, two-thirds of those who would not switch would not do so as they do not understand the sector or are concerned about the return on investment.
Unless advisers make the effort to understand the balance between a client’s values as well as their appetite towards risk and return, rather than just push their own ill-informed prejudices, then they are failing their clients.
Again, this is about best advice, which means allowing clients to make informed choices based on all the information available. They may be willing to give up a small part of their return or entertain more risk by screening out those companies that profoundly offend their own values – not that there is any evidence that an investor needs to entertain lower returns or more risk if they are well advised.
It cannot be best advice to advise an investor who supports organisations that work to protect people or the planet to invest in organisations that are involved in the harming of people or planet.
Lee Smythe of Smythe & Walter Chartered Financial Planners eloquently describes the current dilemma for advisers. “Given the option, more clients would want to consider being ethical, environmentally friendly or whatever other label may apply with their investments”, he says.
“This is where the investment managers need to play their part in providing sufficient options to build suitable portfolios.
“Unfortunately this then becomes a little bit ‘chicken and egg’ in that they won’t provide better solutions for a demand which doesn’t exist and demand is unlikely to increase hugely until better solutions are available.”
If you want to know more about ethical, socially responsible or sustainable investment read our free guide here.
Ways Green Preppers Are Trying to Protect their Privacy
Environmental activists are not given the admiration that they deserve. A recent poll by Gallup found that a whopping 32% of Americans still doubt the existence of global warming. The government’s attitude is even worse.
Many global warming activists and green preppers have raised the alarm bell on climate change over the past few years. Government officials have taken notice and begun tracking their activity online. Even former National Guard officers have admitted that green preppers and climate activists are being targeted for terrorist watchlists.
Of course, the extent of their surveillance depends on the context of activism. People that make benign claims about climate change are unlikely to end up on a watchlist, although it is possible if they make allusions to their disdain of the government. However, even the most pacifistic and well intentioned environmental activists may unwittingly trigger some algorithm and be on the wrong side of a criminal investigation.
How could something like this happen? Here are some possibilities:
- They could share a post on social media from a climate extremist group or another individual on the climate watchlist.
- They could overly politicize their social media content, such as being highly critical of the president.
- They could use figures of speech that may be misinterpreted as threats.
- They might praise the goals of a climate change extremist organization that as previously resorted to violence, even if they don’t condone the actual means.
Preppers and environmental activists must do everything in their power to protect their privacy. Failing to do so could cost them their reputation, future career opportunities or even their freedom. Here are some ways that they are contacting themselves.
Living Off the Grid and Only Venturing to Civilization for Online Use
The more digital footprints you leave behind, the greater attention you draw. People that hold controversial views on environmentalism or doomsday prepping must minimize their digital paper trail.
Living off the grid is probably the best way to protect your privacy. You can make occasional trips to town to use the Wi-Fi and stock up on supplies.
Know the Surveillance Policies of Public Wi-Fi Providers
Using Wi-Fi away from your home can be a good way to protect your privacy.However, choosing the right public Wi-Fi providers is going to be very important.
Keep in mind that some corporate coffee shops such a Starbucks can store tapes for up to 60 days. Mom and pop businesses don’t have the technology nor the interest to store them that long. They generally store tips for only 24 hours and delete them afterwards. This gives you a good window of opportunity to post your thoughts on climate change without being detected.
Always use a VPN with a No Logging Policy
Using a VPN is one of the best ways to protect your online privacy. However, some of these providers do a much better job than others. What is a VPN and what should you look for when choosing one? Here are some things to look for when making a selection:
- Make sure they are based in a country that has strict laws on protecting user privacy. VPNs that are based out of Switzerland, Panama for the British Virgin Islands are always good bets.
- Look for VPN that has a strict no logging policy. Some VPNs will actually track the websites that you visit, which almost entirely defeats the purpose. Most obviously much better than this, but many also track Your connections and logging data. You want to use a VPN that doesn’t keep any logs at all.
- Try to choose a VPN that has an Internet kill switch. This means that all content will stop serving if your VPN connection drops, which prevents your personal data from leaking out of the VPN tunnel.
You will be much safer if you use a high-quality VPN consistently, especially if you have controversial views on climate related issues or doomsday prepping.
How Going Green Can Save Your Business Thousands
Running a company isn’t easy. From reporting wages in an efficient way to meeting deadlines and targets, there’s always something to think about – with green business ideas giving entrepreneurs something extra to ponder. While environmental issues may not be at the forefront of your mind right now, it could save your business thousands, so let’s delve deeper into this issue.
Small waste adds up over time
A computer left on overnight might not seem like the end of the world, right? Sure, it’s a rather minor issue compared to losing a client or being refused a loan – but small waste adds up over time. Conserving energy is an effective money saver, so to hold onto that hard-earned cash, try to:
- Turn all electrical gadgets off at the socket rather than leaving them on standby as the latter can crank up your energy bill without you even realizing.
- Switch all lights off when you exit a room and try switching to halogen incandescent light bulbs, compact fluorescent lamps or light emitting diodes as these can use up to 80 per cent less energy than traditional incandescent and are therefore more efficient.
- Replace outdated appliances with their greener counterparts. Energy Star appliances have labels which help you to understand their energy requirements over time.
- Draught-proof your premises as sealing up leaks could slash your energy bills by 30 per cent.
Going electronic has significant benefits
If you don’t want to be buried under a mountain of paperwork, why not opt for digital documents instead of printing everything out? Not only will this save a lot of money on paper and ink but it will also conserve energy and help protect the planet. You may even be entitled to one of the many tax breaks and grants issued to organizations committed to achieving their environmental goals. This is particularly good news for start-ups with limited funds as the Environment Protection Agency (EPA) is keen to support companies opening up their company in a green manner.
Of course, if you’re used to handing out brochures and leaflets at every company meeting or printing out newsletters whenever you get the chance, going electronic may be a challenge – but here are some things you can try:
- Using PowerPoint presentations not printouts
- Communicating via instant messenger apps or email
- Using financial software to manage your books
- Downloading accounting software to keep track of figures
- Arranging digital feedback and review forms
- Making the most of Google Docs
Going green can help you to make money too
Going green and environmental stability is big news at the moment with many companies doing their bit for the environment. While implementing eco-friendly strategies will certainly save you money, reducing your carbon footprint could also make you a few bucks too. How? Well, consumers care about what brands are doing more than ever before, with many deliberately siding with those who are implementing green policies. Essentially, doing your bit for the environment is a PR dream as it allows you to talk about what everyone wants to hear.
Going green can certainly save your money but it should also improve your reputation too and give you a platform to promote your business.