Ethical Investor Magazine,  Ethical Investment Advisers surviving the Storm, March 2009.

Courier Mail Newspaper, Taking a stand creates a Better World,  May 2009.

Financial Planning Magazine,  It's time to get personal,  Vol. 22, Issue 6, July 2010 (see below).  

These articles are the opinions of the authors and are not those of the Authorised Representatives of Ethical Investment Advisers.

 While you might have heard a lot about responsible investments, you may not have thought about how you can provide responsible investment advice, as MEGAN LEWIS, from the Responsible Investment Association of Australia, explains.

 It's no coincidence that following two years of volatility the local bank manager has reappeared. Once again you can share a cup of tea with someone paid to know your name, not your account number.
  Why this renewed commitment to personal service? It's what customers now demand if they're going to give you their hard-earned cash.
  This change won't surprise planners. Some may have felt it first-hand as clients, in response to plummeting portfolio balances, question their planner's investment ability.
  What planners may not know is that responsible investment (RI) advice is one way to create client relationships that are honest, mutually satisfying and based on long-term objectives.

What is responsible investment advice?

  It may in fact be more helpful to explain what responsible investment advice is not. It's not about being an ethical or responsible person. It's not even about meeting obligations to provide appropriate advice based on your client's needs. Such attributes are essential to being a planner (they're legal requirements) but they don't constitute responsible investment advice.
  "Responsible investment advice is the ability to create a wealth management plan that achieves a client's financial goals while at the same time supports their personal views regarding issues like how the environment should be treated, what sort of society they want to live in or how companies should act and manage their resources," said Louise O'Halloran, executive director of the Responsible Investment Association Australiasia (RIAA), the peak body for RI in Australia and New Zealand.

How is RI advice different to traditional advice?

  Responsible investment advice seeks to create a wealth management plan that incorporates what's important to your client in all parts of their life.
  "The client-adviser relationship is stronger when there is an alignment of values - it's a deeper connection than going for the same footy team It is the responsibility of an adviser to manage

Karen McLeod

a client's money to achieve their financial goals in line with their personal values," said Justin Medcalf, an RIAA-certified planner who started his specialist RI advice business, Green Equity Management (GEM), a year ago.
  "At the end of the day it's about really knowing your client," said Lisa Greeve, principal adviser for Greeve and Associates in WA, which is also certified by RIAA. "If you real do know your client and take the time to talk with them at length about their values, you will learn of any ethical leanings. It's then about

structuring your investment solution to consider their areas of concern."
  Greeve now stars her conversations with clients around what they truly value and then works out where money fits in. This is a very different approach to the one she used as a bank planner.
  "You can't offer this advice and not be authentic - people will see straight through you if you are just 'greenwashing'. You can't control markets or investment performance but you can understand what's important to your client and design a plan that matches their risk profile and values," Greeve said.

Why should investors care about the environment and society?

  Some planners may ask, isn't your role purely to achieve the highest return possible for your client?
  "My clients don't want to only know the financial performance of a company, they want to know about the company's environmental performance and their employee conditions," said Karen McLeod, a planner with Ethical Investment Advisers, one of the first dedicated RI practices in Queensland, certified by RIAA since 2008. "Our clients expect returns that go beyond financials - they want to do good while making money."
  RI-trained planners say this is a common position. It's the inclusion of the environmental, social and governance (ESG) considerations that enhance their planner-client relationships, provide a point of difference from other planners and give professional satisfaction.
  "There is also the fact that there are pressing environmental, social and governance issues that you need to protect your client's investments against," cautioned Medcalf.

What are the hallmark of a responsible investment adviser?

  Ask planners who offer responsible investment advice and they'll say you have to:

•  Acknowledge our world is facing pressing environmental and social challenges that we have a moral obligation to deal with in a way that meets current needs without jeopardising future generations.
•  Know how investments strategies can be designed, implemented and managed in consideration of these issues
Be able to ask clients how they view these issues and create a 'values profile' for them which will help you to prepare their wealth management plan.
•  Continue to stay abreast of the issues so you're able to deal with question from clients that aren't centered on how much money they made last year.

  Aaron Schjelde, a planner with Bridges Financial Services based in northern Tasmania where the community has a high percentage of Greens voters, said the skills needed include active listening, empathy, creative and critical thinking and research skills.
  "You have to have empathy when you offer advice but when offering RI advice, you have to accept where your client is coming from with regards to ESG issues as well, "said Schjelde, who was certified by RIAA earlier this year.
  "You need more critical investigative skills, more research and more insight - particularly if you are going to offer direct share advice," added McLeod.
  This view is shared by another Bridges planner who is certified by RIAA, Adam Ordelman. "Clients will test you on your recommendations because they will typically be watching what the company is doing as well. The conversations you have with your clients can be quite robust."

How to get started

To determine if responsible investment advice is for you, ask yourself - what sort of service do I want to provide and what sort of business do I want to build?