Laggard advisers told to sharpen up on RI
New Zealand advisers have been slow to pick up on responsible investment (RI), but they have been warned that failing to do so could one day put them in the sights of regulators.
Friday, November 16th 2012, 7:31AM 
2 Comments
by Niko Kloeten
At the New Zealand Responsible Investment Briefing in Auckland yesterday, Money Matters financial adviser Rodger Spiller said it appeared other New Zealand advisers were finally taking notice of the subject.
“It’s really heartening to see the number of advisers here today… although I would have hoped it would happen before now,” said Spiller, who was the first adviser in this country to be certified by the Responsible Investment Association of Australasia (RIAA).
“It’s often quite challenging in the New Zealand context to get advisers engaged with responsible investing. I’ve been banging on about it for 20 years.”
Part of the problem, he said, is the lack of local products for New Zealanders keen on responsible investing.
“It’s a chicken and egg syndrome; there aren’t enough products to meet client demand but from a fund manager’s perspective there’s not enough demand to make the products.”
Justin Medcalf, managing director of responsible investment-focused adviser firm the Emerald Group, told the conference that addressing clients’ interest in ethical investing could soon become a regulatory requirement in Australia.
“One of the things coming through is this notion of fiduciary duty. Advisers will have to prove they have addressed clients’ needs; that relates to products,” he said.
“There’s been some discussion around does this mean that if a client comes in with an ethical or values-based concern and the adviser doesn’t address this concern, the adviser can’t service the client?”
Medcalf said this raised the question of whether advisers are asking the question about responsible investing, as well as the quality and accuracy of advice they are giving if they are.
“I used to have clients coming into me and say, ‘I thought it [responsible investment] underperformed? I had an adviser telling me, why would you want to lose returns?’”
Spiller said New Zealand advisers should take heed of Medcalf’s comments.
“There are a whole lot of laggards out there and there might be some compliance type situation when the clients aren’t getting the service they expect.”
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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I was wondering, whether I may ask for a list of all attendees at the RI conference? I want to make sure they used public transport to get to the venue and didn’t use private cars, which as you know idle at traffic lights and are responsible for the pollution our planet suffers from. Another question, did the conference caters make sure the food on offer was sustainably grown, harvested, picked and packed and by the way, was it cooked with hydro produced power or evil fossil fuel gas.
My non-attendance, at the RI conference doesn’t mean I don’t take RI seriously, just you watch me go hug a tree at lunch time today.
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So, if a NZ adviser can't find an investment product that isn't in some way proven to be carbon emission friendly or devoid of any association with gambling or those who abuse human rights etc. he/she should not be allowed to service their client? Good luck finding a scheme that delivers a decent return to your client that isn’t at least in some way associated with the above. If memory serves me correctly some of the Kiwisaver money is currently invested with a multi-national company that among other things manufactures land mines (the Greens were upset about that a while back) Reality check – the worlds corporations/fund managers have their hands in many different pies and some of these may not always be particularly appetising to those wood be investors who place their social conscious “above all else” when shopping for a suitable investment scheme.
Last time I checked the majority of NZ investors just want to place their money in a scheme that will be “safe” and given me a half decent return. Yes it’s nice to be a good Earth citizen when you can but the lines are very blurred nowadays given the way the world’s corporations etc. run their empires. If NZ advisers have to start worrying about upsetting a client’s sensibilities and thus potentially involving the regulators because the investment scheme we place them in to is not “clean and green” or "PC" then I suggest we are very selective indeed in the type of clients we look to act for in future.
For a definition of what responsible investment is all about check out the link below – read the “RESPONSIBLE INVESTMENT SCREENING” paragraph
`http://www.responsibleinvestment.org/what-is-responsible-investment/responsible-investment-defined/