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New research shows IFAs see increase in demand for ethical investments


Research from Heartwood Investment Management reveals that one in four (25 per cent) IFAs have seen an increase in client demand for ethical investing over the last few years but just two in five (43 per cent) are satisfied with the current range of ethical investment options on offer. 

The research, which canvassed the views of UK based IFAs, revealed that more than four in five (81 per cent) would prefer to invest in a globally-diversified ethical portfolio for their clients. Just one in ten prefers investing in a single-strategy ethical fund.
Heartwood writes that the reason for their preference is attributed to managing client risk. Nearly a third (31 per cent) of intermediaries have struggled to manage their client’s risk when buying single strategy ethical funds in the last six months.
The research by Heartwood Investment Management also highlighted the need for an integrated screening process when building ethical portfolios, saying that more than three in five (62 per cent) intermediaries would prefer to invest in a diversified ethical strategy that applies both positive and negative screening criteria.
Matt Hollier, Head of Investment Product at Heartwood Investment Management, says: “Our research has clearly identified a growing demand for ethical investing amongst IFAs and their clients. But digging deeper, there is a clear level of concern by advisers about whether single strategy ethical funds can deliver the appropriate risk / return trade off. We are struck that four in five advisers prefer a globally diversified ethical portfolio for their clients. It is also clear that a significant majority of advisers prefer an investment approach that blends a positive ethical overlay with standard negative screening.”
Noland Carter, Head of Heartwood Investment Management, says: “Clients are increasingly looking to have portfolios managed in a way that is aligned with their values and ethical concerns. Our IFA partners provide critical input to the design of our investment solutions and I am delighted that we have been able to launch new strategies that align strongly with the feedback we have received. More broadly, we believe this also reflects the needs of a wide range of private investors, charities, trusts and institutions.”

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