Ethical investors are not only thinking about the return on their money but the financial impact of how their investments are managed as well.
Transferring a fund from a UK pension in to a QROPS is an ideal time for many investors to consider the consequences for others from their investments.
Next week is National Ethical Investment Week (November 7 – 13) in the UK, and a number of financial organisations are taking the opportunity to promote what they see as a different way of doing good.
Likewise, many QROPS investors could look at less mainstream investments that are still financially viable as savings with the added benefit of fair trade for those who are less well off.
Nick Scarrett, head of investment and pensions at the Fair Investment Company explains why making green and ethical financial choices is just as important as drinking Fairtrade coffee.
“While many of us would go out of our way to avoid unethical products, ethics are often not considered when it comes to finances, but the same principles should apply. If you care where the coffee you drink comes from, then you should care how your money is being invested,” he said.
Although Mr Scarrett is talking about UK finacial products, the same applies to QROPS.
All offshore pension schemes have a much broader range of investment options than their onshore equivalents.
Following the credit crisis, many investors have a more acute financial responsibility and would gladly see a proportion of their money invested in a way that was advantageous to the less well-off in the world.
UK ethical finance figures reflect this. Between 1999 and 2009, ethical finance has enjoyed 373% hike from £5.1 billion to £19.2 billion. This total includes:
- A 423% lift in ethical banking from £2.1billion to £9 billion,
- Ethical investments up by 332% from £2.9 billion to £9.5 billion
- A 438% rise from £150m to £657 million in money held in credit unions and ethical shares.
The figures show that ethics are not at odds with finance and that many investors want to use their money for the power of good.