In conversation with advisers: How to explain what sustainable investing is to clients
Partner Insight: Dennis Hall, director and CEO of Yellowtail Financial Planning, Julia Dreblow, founder of SRI Financial Services and Frank Potaczek, head of UK proposition at Architas met in London to discuss how they broach the topic of sustainability and responsible investing to clients.
In the first video of the series, they talk to Julian Marr, Editor of Professional Adviser about what clients know about sustainable and responsible investing.
Dreblow starts by trying to define what SRI is: "SRI, is the whole investment area which involves sustainable and responsible investment issues under which sits topics like the environment, social and ethical issues. That then sub-divides into lots of individual strategies."
Hall explains that it has been difficult for him to explain to clients what sustainable investing is and it can be a confusing topic.
"Clients who walk through the door have one word in their mind, which is ‘ethical'. So they don't want to invest in tobacco, or arms, but beyond that there are a very few clients who want to take it to the next level. I think we have issues with three-letter acronyms also there are words like ‘sustainable' which crosses over into the ‘sustainable retirement' sphere, henceforth, we have a bit of confusion with our clients about what we mean by ‘sustainable.'
Potaczek says: "It is difficult, if you look at some of the research out there, younger people, millennials are looking much more at ‘positive impact'. They are more interested in reversing climate change, fixing the planet and renewable energy, whereas the older client is looking at exclusionary screens, not investing in tobacco or fossil fuels, for instance."
