Misconceptions remain around RI investment pricing
One of the biggest misconceptions in responsible investing is that products are more expensive than traditional investment products, according to a panel.
Speaking at an Evergreen webinar, Ethical Invest Group founder, Alexandra Brown, said in some cases RI products were more expensive, but that there were more products coming to market that were competitively priced.
“These managers are also competing on fees and price as well and I feel that is helping to bring the cost down,” said Brown.
“There are a lot more exchange traded funds (ETFs) and lower fee options as well that you could incorporate in a portfolio to help bring that overall cost down.”
Karen McLeod, financial planner at Ethical Investment Advisers, added it was important for advisers to have discussions with their clients about RI fees.
“One of my colleagues puts it this way: ‘would you prefer to pay 0.2% more in fees for these outcomes or would you not?’
“So then the client can make that decision if they want that particular actively-managed fund, they can choose that, if they'd prefer to go with a more passively-managed ETF that has less engagement, they can go with that fund.”
One option was to utilise lower cost passive RI investments in a client’s core portfolio with more expensive actively-managed and higher-engagement funds as a satellite investment.
AUTHOR
Liam Cormican
Recommended for you
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
Responsible investment performance concerns have lessened as the market hits $1.6 trillion in AUM, according to RIAA’s annual report, but greenwashing fears among asset managers are on the rise.
