Ethical ratings for 20 green and ethical investment funds. How to choose an ethical investment fund, returns on ethical investments, fund carbon footprints, transparency, alternative investment methods and Best Buy recommendations.
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Finding someone who will respect your ethical principles and take them seriously, is easier than it used to be.
Independent Financial Advisors (IFAs) tend to operate as small businesses, partnerships or sole traders and there are more than 5,000 in the UK. IFAs used to focus on a specific region, but nowadays many will advise nationally.
In recent years, money has been pouring into ethical funds, many of which have been performing better than traditional funds for a while now. This means that even previously cynical advisers are showing more respect for this approach and you’d be hard-pressed to find one that didn’t mention ‘sustainability’ or a similar buzzword at least once in their promotional materials. In a way, this can make finding a decent ethical adviser harder than it was.
Finding an ethical financial advisor
The Ethical Investment Association is a group of IFAs who are "keen to offer green and ethical investment advice to their clients". It was founded in 1998 and is now a sub-group of the UKSIF – the UK Sustainable Investment and Finance Association.
They have a list and contact details for their 58 current members on their website.
If you want to narrow this list of 58 down even further, pioneers in the field with solid reputations, and who we know at Ethical Consumer, include:
- Castlefield Advisory Partners, Manchester, London & Salisbury. Tel: 03300 884 890.
- The Ethical Investment Co-operative, York. Tel: 01748 889 440
- The Ethical Investors Group, Cheltenham. Tel: 01242 539 848
- Investing Ethically, Norwich. Tel: 01603 309020
All four, as you can tell from the names, focus exclusively on ethical investment advice.
Three more, also focussed on ethical advice, and who we have recently been impressed by are:
- EQ Investors, London Tel: 0207 488 7110
- Simply Ethical, Middlesex. Tel: 0208 945 3786 - Offers both socially responsible investment advice and Sharia-compliant arrangements
- The Path Financial, London, Brighton, Manchester, Exeter, Bath Tel: 03330 503 300
Personal chemistry
We always like to add that, even with ethical advisers, you do need to find someone with whom you are comfortable personally, and it may be worth trying more than one. As one of our subscribers wrote to us:
“I had some money I wanted to invest and so I started looking for a financial adviser. I found quite a few who claimed to know about green and ethical investments, but I wasn’t impressed by any of them. They explained that I could cut out certain companies, but they didn’t really seem to understand what I wanted to do. It took a while to find someone on my wavelength, but when I did, it made such a difference.”
Costs and minimum investments
Since January 2013, when new regulations came in, financial advisers have had to charge a fee for investment, pension, and endowment advice rather than accepting commission. It is normal to agree a fee in advance and rates are commonly around £100-£250 per hour.
Approaching a firm for bespoke advice is rarely recommended for people with less than £50,000 or even £100,000 to invest (which is the majority of UK citizens).
However, they can be really useful for complex long-term arrangements like pensions and mortgages and we suggest consulting them occasionally in some of our money guides. With an online platform or app though, it is possible to start investing ethically from as little as £2 per week.
Ethical Investment Platforms and Robo-Advisors
For those with smaller sums to invest or save, it is possible to start online with as little as £2 per week, though the 'advice' will come from a series of questions on a website or app, rather than a relationship with a real human being.
We discuss ethical investment platforms in more detail at the end of our Guide to Ethical Funds.
We also rank some of them against our usual criteria in our Guide to Ethical Investment ISAs and our Guide to Ethical Stocks and Shares ISAs.
It is also worth noting that some of the websites of the IFAs discussed above enable logins to trading platforms too, so there is some overlap in what is available.
