As a financial adviser, when you’re building a portfolio for a client you want to make sure that the investments align with the client’s investment timeframe and their comfort zone. But increasingly investors are looking for greater choice, and to have their investments align with what they believe in. 

As a result, ethical investing is becoming a more mainstream part of many financial advisers’ businesses and is something that investors are taking more of an interest in. Marshall Brentnall, Director and Adviser at Evalesco and AAN Investment Committee Member, recently chatted with Sarah Kendell, Editor Wealth at Momentum Media and Host of The IFA Show podcast. You can tune in to the full episode or read on for our summary of the chat. 

Ethical investing is capturing attention 

Marshall shared his views that over the past couple of years, it’s been a bit of a slow burn in terms of mainstream attention for sustainable and ethical investing, but in recent times it’s front and centre. It’s capturing more attention and as a result, clients are more aware of it.

“In terms of specific demand, we see it in two particular areas. The first avenue we’re seeing the most interest is with younger clients, those who are accumulators or millennials. They’ve often got an appetite to ensure that their superannuation or wealth strategies are 100% invested in ethical or a sustainable strategy. And the second would be those that are the traditional domain of financial advisers, the pre-retirees who are seeking a more modest approach, with the feedback being that they don’t want to wreck the planet but they don’t want to jeopardise their life savings either” said Marshall. 

Navigating the difference options available

As an adviser with more than two decades of experience, Marshall Brentnall has seen that when new ways or themes of investing start to gain traction, there can be a push by many fund managers to rush to market with products that might not necessarily be investment grade.

So when his firm wanted to find the right options for their clients they wanted to do as much due diligence and research as they could to make sure that the portfolio they delivered was not only based on client’s ethical considerations, but would deliver investment outcomes as well. 

The creation of the AAN sustainable model

With that in mind, for the last 12 months Marshall and his colleagues on the Investment Committee at AAN researched, tested and modelled all manner of investments that were ethical, sustainable and ESG friendly. When they couldn’t find a portfolio that suited their requirements, it led them to creating the AAN sustainable model. 

“This model has been built from the ground up to ensure that it aligns with our sustainable investment philosophy and also is designed for investors in the accumulation stage that want to access a solution for 100% of their growth strategies, or for retirees who perhaps want an exposure of 20 – 30 % in that category’ said Marshall.

A tipping point for ethical considerations in portfolio construction

While Marshall does believe ethical investing will become more common, in the wider market there is still some work to do in terms of diversified strategies available to investors. 

“What we’re seeing in the marketplace is there are a lot of single sector funds, and there are several diversified strategies that might be run by a particular fund manager, however, there are few (if any) solutions that bring multiple funds together. We also need strategies to support advisors and bring them on the journey to make the conversation easier both with the adviser and to enable better and deeper conversations with clients” said Marshall. 

For those looking for a solution in this area, the AAN Sustainable Growth Model allows you to ensure your clients will access a best of breed solution that has a common sense approach to investing. 

To learn more about our Sustainable Growth Model download the fund profile and brochure or make a time to meet with your adviser to determine whether this investment is right for you.

This article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this material is General Advice and does not take into account any person’s individual investment objectives, financial situation or needs. Before acting on any of the information included in this article you should consider whether it is appropriate to your particular circumstances, alternatively seek professional advice. Any references to past investment performance are not an indication of future investment returns. If you are a retail client this article will not be suitable for you, please discuss with your financial adviser. Prepared by AANAM ABN 37 609 544 836; Authorised Representative number 1238848 of AAN, ABN 13 602 917 297 AFSL 472901.