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Introduction to Fund EcoMarket Oct 2012 final with narration


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Introduction to Fund EcoMarket - the SRI database tool for UK Financial Advisers

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Introduction to Fund EcoMarket Oct 2012 final with narration

  1. 1. Julia Dreblow October 2012For use by UK financial services professionals only
  2. 2.  Introduction What is ‘Fund EcoMarket’ & ‘Panacea Fund EcoMarket’? Why should advisers use Fund EcoMarket? Advice Process About
  3. 3.  This presentation introduces and explains Fund EcoMarket – an easy to use database tool which helps UK financial advisers identify clients’ SRI aims and match them to SRI fund options Its purpose is to help advisers offer Sustainable and Responsible Investment options more easily and more often This in turn will enable advisers to make more of growing public interest in green and ethical issues and help give more clients access to funds they may be interested in
  4. 4.  UK screened SRI funds c£11bn (from £4 bn 10 years ago) – around 1.5% of retail investment market according to EIRIS, 2011.These figures are dwarfed by institutional assets... Eurosif (2009) estimate £5 trillion across Europe, of which 92% is institutional Worldwide institutional investment interest has ballooned in recent years eg UNPRI (United Nations Principles of Responsible Investment) membership now exceeds 1000 signatories, with total assets of over $30 trillion
  5. 5.  Simple.  An easy to use tool that helps advisers to identify clients ‘SRI Aims’ (with an integral ‘StyleFinder’ fact find tool) and match them to relevant fund options. The tool works by clustering all SRI funds into ‘Styles’. Comprehensive.  A database of all retail, onshore, regulated green, ethical and SRI funds – which also introduces the major SRI strategies and shows which funds fall within which SRI Style. Unique.  Compliments exiting tools – this tool ‘gap fills’ – it does not reproduce existing adviser tools. It fills the hold in between the wide range of financial tools on offer and SRI analysis services. It is neutral, non judgemental , independent – and different.
  6. 6. • All retail SRI funds listed* – with additional ‘Engagement’ options • Over 400 fund entries (listed by distributer)• All major retail product areas covered • Life, Pension, UT/OEIC, IT• Listed by high level investment sectors • eg UK Equity, Global Equities, Mixed, Bond, Income, Europe, Prope rty, Other• All major SRI Approaches included • 7 Styles – across SRI market (with additional information on newer ‘specialist’ options)*Source: Capita/Synaptic Research
  7. 7.  Traditional Ethical funds primary approach is clear, strict avoidance of a range of negative ethical or ‘values based’ activities. They are likely to also consider environmental and social issues, screening out companies that do not meet the fund’s negative criteria. May use international norms or standards. Responsible Engagement May also have positive criteria but these do not override the fund’s core negative screens. Sustainability Themed Balanced Ethical funds are ethically screened funds Balanced Ethical that balance the positive and negative aspects of companies across a range of ethical, social and Environmental Theme environmental issues. Likely to invest in most sectors, may favour market leaders or ‘best in sector’ Traditional Ethical companies. Tend to have fewer absolute negative exclusions than ‘traditional ethical’ funds. Faith Based Faith Based funds invest in line with a specific set of Clean Technology religious values. This is a small group of funds with few investment options at present.
  8. 8.  Sustainability Themed funds research a range of issues relating to the sustainability agenda when considering where to invest. They aim to hold positive, forward-looking companies, with strong environmental and social credentials. Fund managers typically favour companies that are well placed to Responsible Engagement benefit from regulatory and legislative change. Sustainability Themed Environmentally Themed funds significantly integrate environmental opportunities and risks into Balanced Ethical their investment decisions. Environmental funds may focus on a range of environmental themes or Environmental Theme specialise in a single issue or resource. Some environmental funds consider social and ethical issues Traditional Ethical alongside environmental criteria. Faith Based Clean Technology funds specialise in clean technology and environmental solutions companies. Fund Clean Technology managers often focus on environmental markets and may favour pure-play companies that are well placed to lead change. These are thematic funds and do not have ethical screening criteria.
  9. 9.  Responsible Engagement Responsible Engagement options are regular or ‘mainstream’ funds, offered Sustainability Themed by SRI fund managers and others. They encourage Balanced Ethical positive change through dialogue and shareholder / Environmental Theme investor engagement strategies. Engagement does Traditional Ethical not normally directly impact investment strategy. Faith Based Clean Technology SRI Services ‘Styles Directory’ link
  10. 10. SRI Styles: diverse motivations and drivers Different fund styles suit different clients... Ethical/Personal Values Business/Financial Influences Responsible Engagement Sustainability Themed Faith Environmental Theme Balanced EthicalFund Manager view of clients’ Clean Technology ‘I want to make money and .....’SRI aims & motivations: Traditional Ethical Reflect personal Combine ethical considerations with Benefit financially from being ‘ahead of values/beliefs by avoiding business trends to help reduce risk and the curve’ . Want fund manager to focus unethical industries or benefit from holding more responsible on environmental, social and governance companies . May want to companies - and encourage positive change. risk /opportunity. Favours well informed encourage positive progress Investor wants to feel comfortable with companies or sector/market leaders. and change. responsible, forward looking investment May want to encourage change. strategy.
  11. 11. After logging in you need to : 1. Input your name and your clients name or reference nb. this is for your reference only 2. Select fund ‘SRI Style(s)’ from list. If this is not known ask your client to complete the integral SRI fact find questionnaire which will identify their favoured Style/s 3. Select investment areas of interest from pre-populated list eg. UK Equity, Global Equities, Mixed, Bond, Income, Europe , Property 4. Select Fund/Product type(s); Life, Pension, UT/OEIC and/or IT
  12. 12. •Fund EcoMarket generates... •A ‘FundFinder’ list of all relevant funds from your selected Styles / Sector / Fund Type combination•You tick which funds you and yourclient are interested in•Click ‘save’ or ‘print’ to generatereport and to keep for furtherresearch - and for your audit trail•See website to try it out!
  13. 13.  Helps financial advisers to advise clients better and meet best practice standards  Supports TCF & increased professionalism aims ... as public interest in green/ethical issues is high  Fits with FSA FG12/15 view that client needs must be assessed on an individual basis - and areas like this should not be overlooked  ISO22222 requires advisers to ask SRI fact find question, but is not prescriptive about next steps Helps advisers offer SRI more easily  Matches clients needs to fund options  Highlights different SRI strategies to reduce confusion  Provides an SRI audit trails Can help advisers to develop fund shortlists and portfolios  Integrates ESG issues into advice process  Demonstrates that whole market has been researched (an RDR requirement)  Informs fund research by showing SRI funds by asset style and ESG (Environmental Social and Governance) aspects
  14. 14. • Initial SRI Fact Find Question • Output: Yes / NoStep 1 • Identify SRI Aims • Output: List of relevant SRI styles and/or SRI issues and approaches of interestStep 2 to client • Combine SRI and Regular Fact Find informationStep 3 • Output: List relevant options for further consideration • Identify preferred optionsStep 4 • Output: Shortlist of appropriate SRI fund options • RecommendationsStep 5 • Output: Agree investment choices
  15. 15.  An online service provider specialising in the SRI market Working only in the retail, adviser market Three main links:  – for a wide range of SRI information for IFA use  – fund database tool for advisers only  uk – a client microsite for advisers to offer to clients so they can complete the SRI ‘StyleFinder’ fact find questionnaire in their own time Also available via PanaceaAdviser Ethical Zone from October 2012
  16. 16.  Any queries... please contact me via   07702 563702 Or see...  information purposes only.For use by UK based financial services professionals only.We are not authorised to offer financial advice.Please quote source where cited.
  17. 17.  2011 – bringing new ideas to life...  An on-line SRI hub for advisers  Comprehensive Fund EcoMarket database  Adviser / retail SRI support & consultancy 2008 – 2011, included the following...  SRI Website mark 1  UKSIF SRI Wrap/Platform report  Sarah Pennells book 1989- 2009  Friends Provident L&P - SRI Marketing Manager, SRI Development Manager, Senior IFA Consultant (1996-2008)  UKSIF – Director, Chair of Retail SubCom & on 1st NEIW advisory board (2002 – 2009)  NPI – Broker Consultant (1989-1995), AFPC
  18. 18.  To move retail SRI up a Thank you for listening! gear (or three), by:  Providing thought leadership, ideas, enthusiasm ... and a unique combination of experience and independence  Working with advisers, fund managers and service providers to unlock the potential of the retail SRI market  Providing new services to compliment existing adviser tools so that SRI can fit in with advisers existing ways of working