SUSTAI NABLE I NVESTI NG
June 2019
ALIGNING CLIENTS'
INVESTMENTS WITH THEIR VALUES
EQ Investors is an award-winning chartered financial planning firm with over 60 staff in London and 2,000 clients all around the UK. It is also one of the fastest growing wealth managers in the UK with a strong sense of being a member of a wider community. Sue Whitbread talks to Damien Lardoux, Head of Impact Investing at EQ investors, about how and why the business is so committed to sustainable investment principles
SW: WHY IS THE INTEGRATION OF SUSTAINABLE INVESTMENT STRATEGIES SO IMPORTANT TO YOUR BUSINESS? DL: EQ Investors (EQ) is a staff-owned chartered wealth manager. Our ethical approach to doing business has won us the favour of clients across the UK.
We are proud to be one of first UK companies to be awarded B Corporation status, an internationally recognised standard for companies that believe in business as a force for good. We operate a Matched Giving programme to help our clients and staff to raise extra funds for their favourite causes and we have set up the EQ Foundation as a registered charity. The EQ Positive Impact Portfolios which we launched in 2012 are a unique proposition for investors who care about how and where their money is invested. The portfolios invest in funds which can show that they are supporting companies taking steps to achieve a social or environmental impact as well as a financial return. The reason for launching the portfolios six years ago is that at the time, socially concerned investors could access solutions focused on negative screening, but we wanted to focus on the positive impact. The best companies have always been the ones that innovate, find new ways to serve real needs and solve real problems, and we wanted to capture these impact investment opportunities. In addition to offering these to our own private clients, these are also available as a DFM service to IFAs via nine platforms.
I FAmagazine.com
SW: WHAT ABOUT CLIENTS? HOW CAN ADVISERS BEST MANAGE THE FACT-FINDING PROCESS TO ENSURE THAT CLIENTS’SUSTAINABLE/ ETHICAL VIEWS ARE PROPERLY IDENTIFIED AND INTEGRATED INTO THE PLANNING PROCESS? DL: In terms of our DFM service, what really matters is the way the subject is approached by advisers with their clients. In our experience, a number of advisers avoid the subject for various reasons such as beliefs around underperformance, lack of confidence answering questions or additional complexity in the advice process.
Others tend to ask clients whether or not they have any ethical concerns that should be reflected in their investment portfolio. By phrasing it with negatively connoted words, clients can decline to pursue the discussion any further. Even for those clients expressing an interest, we have seen examples of questionnaires with up to 50 different questions which, as you would expect, can be quite overwhelming. In our experience, clients engage a lot more with the subject when it is kept simple and positively phrased. For example, some advisers ask the following question to their clients as part of their fact finding process – “Would you like your investments to make a positive impact on society and the environment?” and the response is overwhelmingly positive. This gives them a fantastic advantage versus their peers. A survey last year showed that fewer than 10% of advisers are discussing sustainable investing with a majority of their clients.
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