Nutmeg launches ethical portfolios as the race for the green pound gathers pace
The UK’s most established robo adviser Nutmeg today becomes the fifth UK robo adviser to offer an ethical option. Its launch is the latest sign that a formerly niche investment style is moving centre stage. According to independent financial research and consumer insight consultancy BoringMoney.co.uk, activity on the supply side is matched by demand on the consumer side, with particular interest from younger investors and women.
According to data from Boring Money’s Ethical Investment Report, across the four robo advisers which offered ethical portfolios to UK investors as at October 2018:
- The average age of an ethical portfolio holder with the robos is 35 – which is 4.5 years younger than average portfolio holder.
- The average robo customer is eight years younger than the average ‘traditional’ customer (41 years old vs 49).
- Women are more interested in ethical investing than men – 32% say it is very or extremely important to them compared to 14% of men.
Holly Mackay, CEO of BoringMoney.co.uk comments:
Whichever way we ask the question, there are clear signs that an ethical, or sustainable, approach to investing resonates strongly with women. I have conducted hundreds of consumer surveys and focus groups over the last few years and have never heard anything before on any investment-related topic which consistently engages women more than men. It’s really striking.
The concepts are still not widely understood. When analysing the verbatims of over 1,000 consumers, Boring Money found that their open-ended responses indicated a general belief that ethical investing is about blacklisting and negative screening companies, rather than positive screening.
The idea of avoiding certain sectors makes many people uncomfortable, as it is nuanced and rarely as simple as one thing being ‘good’ and another being ‘bad’. We do not like the idea of having someone else’s moral code shoved down our throats.
Arms and weapons, tobacco and gambling were consistently called out as sectors to avoid. Over 60% of current investors expressed a desire to avoid these. Other sectors were more controversial.
However, if the idea is turned around and people are introduced to the idea of using their money to support positive change (rather than to withhold it from ‘bad’ sectors), this is a universally more popular approach. Healthcare, green energy and sustainable agriculture are the three biggest areas where people would like their money to be put to positive use.
In general, the idea of impact investing is more appealing to both female investors and female savers. 61% of women agreed with the statement that they would want their money to be used for positive impact.
Holly Mackay concludes:
This issue still polarises. Across the board, those who don’t find the concept appealing generally report a concern about supposed poor returns – there are still assumptions that putting your money to good use inevitably involves poorer returns. If the industry can tackle these concerns, and take more time to evidence the impact that investors’ money is actually having, we see a huge interest in impact investing which suggests that the race for the green pound will intensify in 2019.
To find out more about the Boring Money Ethical Investing Report visit https://www.boringmoneybusiness.co.uk/research/research-reports/ethical-investing-report
Notes to Editors:
The Boring Money Ethical Investment Report launched in October 2018. This research was conducted using a YouGov survey of 2,055 Brits, and 1,112 readers of The Times. Boring Money also ran two focus groups with a mix of investors and savers in August 2018 to canvas opinions on this topic. It puts the spotlight on market leaders in the ethical investment sector, current products and what consumers really want or expect from trending ethical investment portfolios, and how these compare with traditional investment choices.
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About Boring Money:
(www.boringmoney.co.uk) BoringMoney.co.uk is an independent research and content business which provides information, tips and Best Buys to consumers. The business conducts regular research with industry providers and consumers and looks at the developing DIY investment market from both the customer and provider perspective. Boring Money holds test accounts with over 25 providers and also holds regular focus groups and interviews with consumers to ensure regular input and feedback from the user perspective. Founder Holly Mackay has worked in the investment industry for 19 years and is supported by a team of 10 researchers, analysts and marketing execs. Boring Money is not regulated to give personal financial advice, nor is it regulated by the industry watchdog.