Category: Money Matters

Corporate Governance

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. 

MORE ON THIS HERE

Sustainable funds outperform market

Sustainable funds outperform market

This Good Money Week, the latest Good Investment Review reveals that sustainable funds have outperformed the sector average over the last FIVE years – and in particular throughout the coronavirus crisis.

Since 2015, the ethical UK equity funds monitored have brought average returns of 25.76 per cent compared with 16.52 per cent for the sector. Meanwhile, the ethical global equity funds studied returned an average of 85.23 per cent compared with 76.12 per cent for the sector.

In the eight months to October 2020, 12 of the 15 ethical UK equity funds studied performed better than the market average (80 per cent), as did 41 out of the 56 global ethical funds (73 per cent).

The October 2020 review from Good With Money reveals that despite the financial turmoil of the global pandemic, assets held in funds with an ethical or sustainable label in the UK have continued to rise, reaching a whopping £158 billion. This is up 14 per cent from the previous six months.

John Fleetwood, Director of Responsible and Sustainable Investing at Square Mile, says: “positive impact need not come at the expense of financial returns, and if anything, investing for positive impact can improve returns.”

Divorce

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.

Pension Death Benefits :  NEST

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.