Responsible investments good for advisor arsenal

Responsible investments good for advisor arsenal

Responsible investments good for advisor arsenal Victoria-based proponent of these investments suggests the rest of the mutual fund industry having a hard time keeping up.

Stephen Whipp is an investment advisor with Wolverton Securities in Victoria, B.C. He’s also a board member of the Responsible Investment Association (RIA), Canada’s national ethical investment industry association.

Last week the RIA reported that assets under management for responsible investments have passed $1 trillion in Canada. More importantly, AUM invested responsibly have seen a 68% increase over the past two years with mutual fund growth in the responsible investment category jumping 52% compared to those funds not considered to be responsible investments.

Responsible investments are no longer a passing fancy.

While institutional investors are very familiar with these investments and use them quite liberally, retail investors still have a ways to go in their acceptance. While the total AUM is more than $1 trillion, retail assets account for just $60 billion.

Whipp says, “Retail investors are beginning to understand what many institutional investors such as pension funds figured out several years ago. By investing using environmental, social and governance (ESG) screens, they are actually reducing investment risk.”

An interesting sub-set of this growth is impact investing, which is a form of socially responsible investing with a positive twist in that it attempts provide a social and/or environmental impact in combination with a financial return.

Canadian impact investments total $4.1 billion and have seen more modest growth of 9.5 percent since 2012. A majority of impact investors met or exceeded performance expectations in 2013. Very early in the game, impact investments appear ready to take off.

Advisors might want to take notice.

Whipp’s been investing ethically for the last 12 years. His business is growing as result forcing him to bring on additional advisors and support staff. “The growth of this business is a great problem to have,” says Whipp, “but we do need more advisors who not only have a technical understanding of this area but passion for it as well.”

As they say in the business, “The trend is your friend.”
2 Comments
  • John Burns 2015-01-28 10:10:35 AM
    The facts are in. If you use environmental, social and governance metrics when selecting investments you focus on great companies and managers. Having done this since the 80's, I am always amazed as to how much inertia there is in the retail investment channel.
    Post a reply
  • Will Ashworth 2015-01-28 1:55:44 PM
    Hi John,

    ESG rocks! It seems to be common-sense investing, not RI, ESG or SRI investing.

    Thanks for the comment.
    Post a reply