Responsible and ethical investments are growing at 15 times the rate of conventional investment

Written by Nick Heuzenroeder
(CEO & Founder of Haven Wealth Partners)
www.havenwealthpartners.com.au
Haven Wealth Ethical AR Fund is RIAA Certified

 

Responsible and ethical investments are growing at 15 times the rate of conventional investment, and now tip the scales at $1.2 trillion. While our leaders in Canberra argue as to whether the climate crisis actually exists, investors, both individuals and organisations, are actively seeking to align their wealth with their social agenda.

 

“My clients don’t ask for ethical investments” you might say. I would venture a guess that they seldom ask for income protection or critical illness cover either but I would wager that you have all recommended it a few times during your career.

 

As a financial planner, you are the conduit between these investors and the ethical and responsible investment products you place their money with. And in doing so you must exercise your duty of care when completing the needs analysis and enquire on what is most important to them.

 

Several issues now begin to appear:

  1. Typically needs analysis documents do not feature detailed and open questions on ethical/responsible investment (at least not yet). With the PM Scott Morrison having made some big commitments to take action, it is only a matter of time for this to ripple through the financial planning sector.
  2. Most existing investment product providers are having great difficulty modifying their portfolios to satisfy this investor demand in a genuine and meaningful way. Their portfolios have exposure to a long list of controversial areas which include fossil fuels, mining, alcohol, gambling, weapons, detention centres and CO2 intensive industries. This means that the list of options available to you is limited to a list of mostly old world investment companies “painted green”.
  3. The list of certified ethical and responsible products contains a lot of single sector funds meaning that you potentially need to play portfolio manager as well as strategic adviser.
  4. Further the multi asset funds on the list of certified ethical and responsible products all tend to be expensively priced and most (if not all) still have some exposure to controversial areas.

 

Fed up with the inaction of multi billion dollar investment companies, and the glacial pace that they initiate change, I choose the audacious path and developed a truly ethical investment alternative to help quench this growing investor demand. I turned my back on the safety and security of PAYG at one of these funds to launch Haven Wealth Partners.

 

Our Ethical Absolute Return Fund stands alone as we take the hardest line possible with our investment screening. Consisting of 4 levels:

  1. Fully excluding direct investment in all controversial areas
  2. Applying rigorous financial screens to each asset/company
  3. Undertaking positive screening of each of the remaining investment universe to gain a greater understanding of what action each company is taking to make a difference
  4. Applying a value assessment on each potential inclusion

 

We built this portfolio with you, the financial planner, in mind.  We built possibly the purest multi asset investment which has a 50/50 growth defensive split and accepting zero direct investment in controversial areas. Our true balanced approach means that you can avoid cobbling together single sector options to suit the clients risk profile but can use Haven Wealth as the core and, if required, can add some sector specific funds to complement the portfolio. We build a fund using lean six sigma principles and can deliver a MER lower than that of our peers (retail and wholesale). We are also one of the first carbon neutral investment companies in Australia.

 

It is imperative that you and your staff are across all of the responsible/ethical products out there and do your due diligence and look under the hood to see what exposure each has. As part of this we encourage you to reach out to us and we will happily tell you how we do it.

After all “There is no beauty without truth. There is no truth without transparency”.

 

 

Haven Wealth Partners Pty Ltd is a corporate authorised representative (001292148) of Shartru Wealth Pty Ltd (AFSL 422409), and can provide you with general information only. To read the full disclaimer please click here.

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