Investment professionals

Know your client's values

The motivations for responsible investing vary. For some it's concern about the environment. For others it's religious conviction. Some are simply motivated by the bottom line – and see a sound business case for responsible investing.

As you know, it's a requirement of the FSA conduct of business rules to know your client, in order to give the best advice possible. Until you have asked your client all their needs you can't say you know your client. Just as you'd ask a client about their risk tolerance, you should ask if they have social, ethical or environmental concerns.

In doing so, you are not only meeting your regulatory obligations, but you also open up opportunities to strengthen your client relationships and build your business. Incorporating responsible investing into your business enables you to:

attract new clients who are concerned with what their money does
add value for existing clients by introducing them to responsible investing.

In fact, with more and more people expressing concern with what their money does, existing clients may well expect advice on responsible investing. And if you can't provide it they'll take their business to someone who can.

Responsible investing is included in the new best practice standards in financial planning (ISO 22222) and the new financial advisor exams (FSSC, CII & IFS).
Both Pension Funds and Child Trust Funds are now required to have disclosure regarding social and ethical issues.