Ethics under the shadow of hedging
ETHICAL investments still remain on the outer for financial planners despite frenzied activity in the ethical funds management marketplace last year and increasing investor awareness.
Australian Ethical Investments director James Thier says while there was rapid entry into the ethical market space last year, hedge funds have since been the dominant sector.
“The big emphasis has probably passed and now it’s hedge funds,” Thier says.
But ethical funds are still regarded as niche players, with about 12 currently servicing the market.
However, despite this shift, Thier says ethical investments are definitely more than a fad, evidenced by their strong emergence in the UK and US.
“In the US and the UK, it is a trend and I don’t think advisers have picked that up in Australia,” Thier says.
Five years ago when Australian Ethical Investments conducted research on ethical investments, five per cent of respondents said they had heard of ethical investments.
More recent research by Rothschild found 15 to 20 per cent of respondents said they knew what ethical investments were. In comparison, Thier estimates today some 50 per cent of investors have heard of hedge funds.
However, despite its relatively lower profile to hedge funds at the moment, ethical investing is catching the imagination of investors.
With $200 million funds under management, Australian Ethical Investments has been offering its retail ethical fund, the Balanced Trust, for some 12-years.
“There has been a seachange in it and a new level of investment is being tapped. Advisers would do well to link into that because I don’t think it’s going to go away,” he says.
Recommended for you
The strategic partnership with Oaktree Capital and AZ NGA is likely to pave the way for overseas players looking to enter the Australian financial advice market, according to experts.
ASIC has cancelled a Sydney AFSL for failing to pay a $64,000 AFCA determination related to inappropriate advice, which then had to be paid by the CSLR.
Increasing revenue per client is a strategic priority for over half of financial advice businesses, a new report has found, with documented processes being a key way to achieving this.
The education provider has encouraged all financial advisers to avoid a “last-minute scramble” in meeting education requirements prior to the 31 December 2025 deadline.
