I have been urging people to look at better investments for the past 15 years and finally the theory has been tested. Would Environmental, Social and Governance (ESG) investments do better in a crisis?
Yes, they did.
Most of the good performance has come by always adhering to Environmental, Social and Governance standards (ESG).
I know that my clients and most other investors understand the benefit to the environment and society. What I do not know is if other investors and their advisers understand that a fundamental change has already taken place.
The changes will continue, and it is going to be difficult to spot the difference between ‘greenwash’ and the real deal, now that the flood gates have opened.
The shift started during the financial crisis a decade ago. At the time I was asked to comment on BBC Bristol Radio on Ethical investing.
My strongest memory is of the journalist who expressed disbelief that it was possible to question your adviser, bank, or pension manager about the assets they held.
For my part, the idea that you hand over your savings without understanding what it was financing was unacceptable and contributed to the financial crash.
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Analysis conducted by investment platform Interactive Investor shows that ethical funds are capable of producing better returns than non-ethical siblings run by the same investment house.
Do you know anyone who may be involved in a divorce?
I know its not usual to enquire about their financial settlement at an early stage.
It could be very helpful if you did, as it seems that a majority of divorcing couples are relying on their Solicitors to value the pension benefits.
As pensions are a very complex area of finance, with a wide range of rules and taxation, Solicitors are not generally understanding but instead are relying on the pension trustees or providers to supply the answers.
Clearly the pension trustees and, in some cases, the providers, have a vested interest.
It is important that specific pension advice is sought, to avoid costly mistakes.
We can help ask the right questions and get better, fairer outcomes.
I have only recently been told that the death benefits under NEST should have Nominations for Death Benefits added, as the fund otherwise would go to the member’s estate, where it could be subject to taxation.
As NEST pensions are the preferred pension for many employee schemes it would be helpful if you let any members of the family or friends know. It’s a simple matter to obtain a Nomination form directly from NEST
For those friends or family who are in employee schemes or have retained benefits, it is advisable for them to check the Scheme Rules.