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Economy

#VoiceoftheAdviser2016: What The Survey Tells Us

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The mood in the advice market is both optimistic and confident. It is apparent that there are several headwinds for the financial advice market. Opinions, while positive, are heavily influenced by general economic confidence. It is worth noting that our survey was conducted at the end of 2015.

Those headwinds are first and foremost current and predicted economic conditions.

The Financial Advice Market Review and the inexorable rise of an advice gap also create challenges. ‘Not getting advice’ is a major problem, which the FAMR sets out to address.


This gap has been exacerbated with more advisers asking for a minimum portfolio before advising a client, and those minimum portfolio sizes rapidly steeply since 2011.

This response was natural given the shift from commission to fees-based advice. It will create future problems for the sector as younger investors with inevitably smaller portfolios, never acquire the advice habit and identify alternative solutions and advice sources as their portfolios grow.

In turn, this stimulates another headwind.

The rise of digital-native investors and the growing power of online algorithms or ‘robo-advice’ represent a clear and present danger (and opportunity) to advisers. The financial advice business model, at the most simplistic and reductionist level, is a very well-informed, carbon-based decision-tree.


Sadly, algorithms get it wrong all the time and the nuance of great advice from experienced advisers will be lost for the majority.

Whatever challenges the advice market faces, these issues are magnified in sustainable investment. As the advice gap opens up, more people will be offered generic products that may or may not meet financial goals but will almost certainly ignore social and environmental issues, making those poorer investors more susceptible to predictable shocks.

We are not seeing evidence of a tipping point for sustainable retail investment. 73% of advisers may get sustainable investment advice requests but this is only from 14% of their clients (the lowest figure since 2012). This means the market size was just over 10% in 2015. Those clients then put 59% of their portfolio in sustainable funds.

In 2014, 87% of advisers got sustainable investment advice requests from 37% of their clients. A market size of just over 32%. Those clients then put 55% of their portfolio in sustainable funds.

It would be depressing for the industry if 2014 represented a high water mark for sustainable investment advice, just as the issues the investment strategy addresses become more pressing.

A sustainable investment industry that is still talking to itself?

The Ethical Investment Association – the industry body for ethical financial advisers – has just 56 members. There are 14,550 registered financial advice firms in the UK, and a third provide ethical investment advice. That is an enormous membership opportunity if the EIA seized it with both hands.

There has been consolidation in the market. While this is a positive development for the firms themselves, fewer firms means a quieter voice for the industry as a whole.

Good Money Week creates positive (and negative) coverage for a week but hasn’t broken through to the mainstream. It needs to.

We remain optimistic but concerned

The COP21 dividend, post-Silent Spring generation as investors and senior managers, divestment and increasing signals from the environment that we’re in trouble, have made a compelling case for sustainable investment. Advisers need to be part of the solution, providing well informed sustainable investment advice.

Economy

A Good Look At How Homes Will Become More Energy Efficient Soon

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energy efficient homes

Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.

There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.


1. The Rise Of Smart Windows

When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.

If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.

2. A Better Way To Cool Roofs

If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.

Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.


3. Low-E Windows Taking Over

It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.

They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.

4. Magnets Will Cool Fridges

Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.

The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.

5. Improving Our Current LEDs

Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.

That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.

Maybe Homes Will Look Different Too

Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.

ShutterStock – Stock photo ID: 613912244

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Economy

IEMA Urge Government’s Industrial Strategy Skills Overhaul To Adopt A “Long View Approach”

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IEMA, in response to the launch of the Government’s Industrial Strategy Green Paper, have welcomed the focus on technical skills and education to boost “competence and capability” of tomorrow’s workforce.

Policy experts at the world’s leading professional association of Environment and Sustainability professionals has today welcomed Prime Minister Teresa May’s confirmation that an overhaul of technical education and skills will form a central part of the Plan for Britain – but warns the strategy must be one for the long term.

Martin Baxter, Chief Policy Advisor at IEMA said this morning that the approach and predicted investment in building a stronger technical skills portfolio to boost the UK’s productivity and economic resilience is positive, and presents an opportunity to drive the UK’s skills profile and commitment to sustainability outside of the EU.


Commenting on the launch of the Government’s Industrial Strategy Green Paper, Baxter said today:

“Government must use the Industrial Strategy as an opportunity to accelerate the UK’s transition to a low-carbon, resource efficient economy – one that is flexible and agile and which gives a progressive outlook for the UK’s future outside the EU.

We welcome the focus on skills and education, as it is vital that tomorrow’s workforce has the competence and capability to innovate and compete globally in high-value manufacturing and leading technology.

There is a real opportunity with the Industrial Strategy, and forthcoming 25 year Environment Plan and Carbon Emissions Reduction Plan, to set long-term economic and environmental outcomes which set the conditions to unlock investment, enhance natural capital and provide employment and export opportunities for UK business.


We will ensure that the Environment and Sustainability profession makes a positive contribution in responding to the Green Paper.”

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