Why discuss green and ethical investment with your clients?

Improved relationship with existing clients
If a client considers their IFA is taking into account their values and proactively taking an interest in them for more than just for their money they are much more likely to want to do business with the IFA again, and perhaps more than they might have ordinarily done.  

Increased referrals and Protection of Client Base
Clients are more likely to be happy with their investment as it is aligned more closely to the rest of their personal values. This then translates into better client retention and increased referrals.

Excellent marketing opportunity
Affinity and niche marketing opportunities are easily identified as consumers already interested in ethical issues are still unaware of the existence of all types of green and ethical investment.

Safeguard against future changes
It is possible that future regulation changes may make an awareness of green and ethical investment a compliance factor in the future. In addition world events can influence public concern and as such their attitudes to investment in different companies and in green and ethical investment.

Improved product retention rates
Green and ethical investors have been shown to be more likely to be faithful to their investment and hold on to it through the rough times as often they buy in for more than simply performance.

Protect against Complaints
In the future green and ethical investment may become something that more people report to the Financial Ombudsman Service especially if they have not been offered it on initial consultation.

Compliance
It is increasingly being argued that not checking on a client’s attitude to green and ethical investment is negligence by omission, in the same way as not ascertaining a client’s attitude to risk. From compliance point of view, asking the ethical question needs to be one of the key elements of the financial advice process.

Our Members' Experience
EIA members recognise that if the answer to the ethical question is YES, more work will be involved within the financial advice process. However, this additional work is far outweighed by the goodwill generated between client and adviser. Client retention has to be key to the long-term success of any financial advice business.

Trust
Once a potential green and ethical investor finds out about the ethical choice from the media, it is unlikely that they will turn to their existing adviser for help. The bond of trust has been broken. The radio, broadsheet and tabloid coverage of green and ethical investment is increasing year on year, so it is only a matter of time before your existing clients get to hear about it. Some will not be interested, but those that are will consider your past advice to be irrelevant to their needs.

The best financial advice practices are based upon securing long-term income from ongoing fees, renewal and fund based commission. Therefore, a slow trickle of clients away to other advisers is going to have an impact over the long-term as ongoing servicing commissions are transferred to the new adviser.