Australian Ethical fixes gaze on adviser market

With nearly one-third of financial advisers utilising Australian Ethical’s investment options, expanding its advised channels remains a key focus for the firm.

Speaking at the firm’s annual general meeting (AGM) held on 12 November, managing director John McMurdo reflected on its FY24 results, which saw an 80 per cent growth in its statutory net profit after tax from $6.6 million in the previous financial year to $11.8 million.

Looking ahead, McMurdo said: “Our brand is moving from strength to strength – from increased brand awareness in the consumer market, maintaining our lead with advisers as the most known responsible investment manager, and elevating our credibility with media.

“Our advised channel continues to grow, and now accounts for more than $1.8 billion of our total funds under management (FUM). A fabulous credit to the hard work and success of our dedicated adviser team.”

Leah Willis, head of distribution at Australian Ethical, told Money Management that responsible investing among financial advisers has continued to strengthen in the past year.

VIEW ALL

View all

She referenced the Australian Ethical 2023 Opportunity Next report released late last year which found 47 per cent of advisers had fully or partially incorporated responsible investing into their value proposition.

“In that [Opportunity Next] paper last year, we saw about 91 per cent of advisers had provided some kind of responsible investing advice, but we also saw almost one in two were starting to incorporate it into their advice proposition.

“They were starting to see some benefits from that in terms of enhanced satisfaction and engagement. I don’t think we’ve seen that change. We’ve seen that continue to grow as we’ve been engaging with more advisers,” Willis told Money Management.

According to Willis, approximately 4,500 advisers have engaged and recommended the ethical investment manager’s products, whether it be through superannuation or managed funds.

She continued: “[We’re] really proud that roughly one-third of the market has actually utilised Australian Ethical’s products, which I think is a proof point of that momentum that we saw in the report last year.”

As responsible investing has shifted from being viewed as a niche in the past to now infiltrating mainstream investment portfolios, Australian Ethical has doubled its investment team to accommodate for this growth.

“We’ve increased the breadth of our investment capability significantly over the last 18 months – we’ve moved from 18 to 36 investment professionals. We now have expertise across private markets, infrastructure debt and also with the more recent Altius acquisition. So we have a full green and sustainable bond offering,” Willis said.

“That really shows that there’s building blocks available for advisers to be able to either build dedicated responsible investing options or blend these into their mainstream models that they might already be using and really access that forward sustainable thematic across different asset classes.”

Australian Ethical completed its acquisition of Altius Asset Management from Australian Unity in September this year.

The combined Australian Ethical and Altius fixed income capability has resulted in a sustainable fixed income team of seven, an expanded bond fund portfolio, and Australian Unity becoming one of Australian Ethical’s largest institutional clients, the firm previously stated.

When asked about future M&A plans for the company, Willis commented: “We’ve continued to scale the business and it’s definitely something that we’re considering.”