Ethical Investment on ‘The Wright Stuff’?!

Posted on 28/01/2012 by

Not a programme I usually watch because I’m usually at work – but one of my friends did see this and flagged it up to me. Now you don’t expect the most considered of debates on ‘The Wright Stuff’ (although he’s a million times better than Jeremy Kyle) but in part 6 of this programme there is a brief but fairly positive discussion about ethical investing.

I’m always glad to see the issue aired especially if it’s somewhere with a wider audience than the money pages of the Guardian! if you watch it – I’d click straight through to part 6……… http://www.channel5.com/shows/the-wright-stuff/episodes/thursday-26c-january

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Moral Capitalism

Posted on 28/01/2012 by

There has been a lot written and spoken about so called ‘moral capitalism’  in the media recently. Much of this driven by the activities of the Occupy movement and the continued trend for senior executive pay of FTSE 100 companies to drift higher and higher despite the financial crisis and the poor performance of many of their businesses.

This is an area that ethical and sustainable investing should be taking a lead in but I regret to say that at the moment as many of the funds have not been that vigilant of the executive pay issue. However, I certainly do think that it gives us an opportunity to contribute to the debate and to further the cause not just for negative screening but for building the debate about values led,  socially responsible businesses that operate as responsible corporate citizens and develop sustainable business models.

I was approached recently by the ‘on-line’ magazine blue&green tomorrow for comments about the Prime Ministers recent speech on the topic; I’m afraid that when I read the transcript of his speech it hit my ‘hot button’ – so they got a bit more a response that they bargained for! However, they must have liked what I said because they published it as a standalone article.  I have attached below the link to the article – these are my personal thoughts and don’t necessarily represent the views of Ethical Futures llp.

Julians article:-  http://www.blueandgreentomorrow.com/features/2012/1/24/were-not-all-in-it-together-the-rise-of-bloated-capitalism.html

J Parrott – Partner

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Henderson Global Investors Disband SRI Management Team

Posted on 28/01/2012 by

As part of our review process at ethicalfutures, we monitor the investments that we have placed clients into so that we can advice you about changes in ethical, governance or performance issues. Generally we are happy with the performance of funds we recommend but we want to take this opportunity to flag a concern that we have about the ethical funds run by Henderson Global Investors.

On 22nd November 2011 the news slipped out (unintentionally) that Hendersons proposed to make their full SRI team (4 researchers & 2 fund managers) redundant. The intention is to replace the dedicated team who carry out primary research on both companies and ethical & sustainability issues and replace them with a simple screen provided by the Ethical Investment Research Service (EIRiS) whilst delegating management of the funds to other managers actively engaged in managing non-screened funds. Whilst the Henderson funds have had mixed performance over the long term, recent performance has been in line with or better than sector average and they have led the way in setting standards for research and development of the socially responsible (SRI) and sustainable investment market. Our concern lies on two fronts; firstly that management is being delegated as what is in effect a ‘part-time’ job to fund managers with no experience of running screened funds and secondly and perhaps more importantly, that the move represents a dilution of the firms commitment to the sector and the quality of research.

As a firm we have no problems with the work of EIRiS but in general have found that funds that simply purchase a screening list, do not fully appreciate the concerns or objectives of clients. In addition to this we have found that over the longer term, funds that do undertake primary research on both themes and specific companies provide a more coherent investment philosophy that includes active engagement with business for incremental improvements in their business management and often better overall investment return for the client.

We have actively engaged as part of the Ethical Investment Association in making our concerns known to Henderson and will be consulting directly with the firm to discuss their plans for the future. At present, we do not wish to make a ‘knee jerk’ reaction but if we are not satisfied with the long term prognosis’ for these funds we may in due course recommend disinvestment and re-allocation to another manager. The funds concerned are: Henderson Industries of the Future, Global Care, Global Care Income & Global Care Managed.

Copy of press release issues by Julian Parrott as Chair of the Ethical Investment AssociationEthical_Investment_Association_Press_Comment_-_Henderson_Global_Investors_disband_their_SRI_Team

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ethicalfutures change regulatory status

Posted on 28/01/2012 by

We have just written to all of our clients about this matter, but for those yet to receive a letter or for new clients not yet notified, there is one very important piece of news that we do need to formally advise you of and that is about a change in our regulatory status.

Financial adviser businesses in the UK are ultimately regulated by the Financial Services Authority (FSA); but this can either be done directly by the FSA or alternatively through a third party know as a compliance network. When Ethical Futures formed in 2005 we elected to go for the third party route of authorisation via a firm called Financial Services Advice & Support (FSAS). This was a practical decision based upon the fact that we had limited resources and FSAS could help by reducing the regulatory burden for us.

Over the past few years, we have grown in terms of staff and resources whilst FSAS have gradually been subsumed into a much larger company through a series of mergers. We felt that the service they offered was less relevant to our needs and therefore we have decided to opt for direct authorisation by the FSA. I’m glad to say that the FSA have granted our application for direct authorisation and therefore with effect from 4th January 2012, Ethical Futures llp are now directly authorised and regulated by the FSA. Our new authorisation number is 552583 and further details about this authorisation can be obtained from the FSA Register which can be found at http://www.fsa.gov.uk/register/home.do .

Our actual investment and product authorisations remain the same as before, so there is no material change in your relationship with us or the issues that we can advise you about. All you will possibly notice is a slight change in the declarations on own company stationary and the requirement to sign a new client agreement (see http://www.ethicalfutures.co.uk/downloads.html for more details), the next time you engage us for financial advice. If you do wish to discuss this with us further, we will of course be happy to tell you more about our decision.

Julian Parrott – Partner

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Merry Xmas!

Posted on 23/12/2011 by

Ethical Futures would like to wish you all a merry christmas and a happy New Year.

Here is a christmas message from our advisers:

http://elfyourself.jibjab.com/view/EP0HTerHtBFcWY4OAWwk

Please note that our office will now be closed until Wednesday 4th January 2012.

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