Personal Finance Society launch new good practice guide
The Personal Finance Society, supported by the government's independent advisory group on social impact investing and the Department for Digital, Media, Culture and Sport (DCMS), have today launched a new good practice guide to explain how financial advisers might assimilate value-based investing into their client recommendations where appropriate.
The guide will incorporate a link to a bespoke ‘conversational tool’ on three levels, tailored to suit different adviser capabilities. Each features a series of easy-to-follow exercises that will enable clients to clearly articulate their preferences on investments that create impact.
“For some time now there has been evidence of a growing interest in schemes that incorporate a ‘value-related’ component, with more than half of individual investors expressing an interest in social impact investments,” stated PFS chief executive, Keith Richards.
“We are aiming to provide guidance on the work that has already been and give an overview of this growing market - including recent government and regulatory activity - to help those investors with an interest in social impact investing to align their savings, pensions and investments with their personal values.”
He went on: “We have seen recent growth in the market for social impact investments that deliver a social impact as well as a risk-aligned rate of return. Meanwhile, the FCA have confirmed that no specific regulatory barriers exist to prevent retail investors or financial advisers increasing their involvement in social impact investing.
“We are proud to be part of an industry-led group, in partnership with government, that is determined to tackle the lack of clarity and potential misalignment of expectations among asset owners, managers, advisers and investors - of which this is the first step.
“Ultimately we want to empower advisers with the requisite social investing skills and market knowledge to proffer it as a viable addition to the traditional alternatives,” he concluded.
His comments were echoed by Tracey Crouch MP, the minister for civil society, who added:
“The UK is a pioneer for social impact investment and this guide supports our commitment to make it easier for people to invest in this way. I urge every financial advisor to take a look at the guidelines and help their clients invest in a way that can help make a positive impact on issues they care about.”
Elizabeth Corley, former CEO and now senior advisor to Allianz Global Investors and chair of the government-backed social impact investing implementation taskforce, commented further:
"In tandem with the recently commissioned impact investment adviser tool, the guide provides a practical resource to help advisers integrate value-based investing into their recommendations, enabling clients to support the things they care about through their choices.”