Most people state categorically that they want their money to be invested in line with ethical principles, but failures in reporting from advisers, banks and providers means many do not understand that their own savings and pensions contained ethical options, research has found.
An independent survey has found that 81 per cent of 2,155 UK adults think financial institutions should do more to report financial information clearly, giving investors a better steer on how to invest ethically.
Conducted on behalf of Good Money Week, the rebranded National Ethical Investment Week which runs until Friday, the poll found young people were the most likely to feel confused when making financial decisions.
When asked about the last time they received financial advice from a bank or financial adviser, only 22 per cent of 18-24 year olds felt that information was clearly presented and they were sure about the decision they were making, compared to 39 per cent of over 60s.
Despite these concerns and a preference for spending on sustainability, 77 per cent were not sure what sustainable investments means and 69 per cent were unaware they have sustainable and ethical options when it comes to their own savings and pensions.
Simon Howard, chief executive at the UK Sustainable Investment and Finance Association, said: “People want to make good money choices that take into account the issues that matter to them, whether it be their own long-term financial security, safeguarding the environment or a combination of both.
“If, as our research indicates, people don’t feel completely comfortable with everyday financial terms and don’t feel that the financial information they receive is easily understood, making informed decisions is virtually impossible.”
Lisa Stonestreet, Good Money Week project manager, added: “These results indicate government and financial institutions are failing to offer clear and simple information about the issues that matter to consumers and constituents particularly those related to sustainability.”
Furthermore, research from Triodos Bank in September amongst 4,013 UK adults found 51 per cent would like to see more of their money invested in renewable energy, however 64 per cent admitted to being in the dark about the activities that their funds or pensions invest in.
Charles Middleton, the bank’s managing director, added: “It highlights a need for greater transparency, supporting the results of Good Money Week’s poll and their call for simple, accessible information about spending on sustainability.”
Last week, speaking to FTAdviser sister title Financial Adviser, John Ditchfield, director of Wiltshire-based Barchester Green Investments and chairman of the Ethical Investment Association, said: “Mainstream advisers are missing a significant opportunity because, as Triodos Bank’s research shows, a large portion of the investing public are interested in ethical investment, but advisers are not giving enough attention to the sector.”
peter.walker@ft.com
