I  enjoyed Ashley’s column this week in ftadviser.com. He makes two or three fantastic points about ethical investing that I really agree with and highlights some of the barriers the sector faces trying to  grow beyond the small 1.5% of funds that are invested ethically in the UK.

I wonder if one of the biggest barriers is the advisory community though?

I’ve been pounding the pavement with an ethical investment into renewable energy projects recently. It offers market level returns, bi-annual income, diversification and a hedge against inflation. Renewable energy is a mature and very well understood technology, so we have a pretty strong idea how much energy the projects will generate, and the government sponsored feed in tariffs guarantee the price the companies will receive for the energy they generate.  The running costs are low, the investments are structured by a regulated firm, all of the projects are based in the UK and so are helping the UK economy….I could go on, but I can’t think of many reasons not to have this in a client portfolio. There are only two real downsides: firstly the investment is for a twenty year term and the secondary market is limited (but growing) so liquidity is an issue. Secondly, the investments are corporate debentures, so although the firm that structures them is regulated, the investments themselves are not covered by the FSCS.

I haven’t had any success with advisers. I’d love to know why. Are those two downsides enough to put advisers off? Would the regulator really come down so hard on an adviser who had recommended investing in one of these projects if it failed for some reason? Should advisers be braver?

Thanks

Dan