Can savings save the planet?

Tackling climate change is on the agenda this week with news of a new initiative to fund the world’s most effective not-for-profit climate solutions.

Recognising a growing desire on the part of many people to make a positive impact on the planet, the Global Returns Project is calling on pioneering individuals to 'Reinvest in Earth' by committing 0.25 per cent of their savings and investments each year to organisations combatting climate change. The goal is to raise a regular annual total of USD10 billion within the next decade and demonstrate to financial institutions the importance of offering their clients an easy opportunity to direct more of their savings and investments toward funding not-for-profit climate solutions.

And there could be plenty of potential 'reinvestors' out there according to a new report from Campden Wealth, Global Impact Solutions Today, and Barclays Wealth, which says that private wealth holders around the world are set to double their allocations to positive social and environment impact investments in the next five years. 

“Wealth holders see the challenging state of the world, and the risks and vulnerabilities both individuals and businesses face due to Covid-19 and climate change, and they want to act," says Dr Rebecca Gooch, Director of Research at Campden Wealth. "Here is where smart investment and deep pockets can make a real difference in impact and ESG investment. For many, responsible investing is not only the ethical thing to do, but it is simply good business practice.” 

Another new report out this week says that even in challenging times, such as the current coronavirus pandemic, financial advisers still deliver value for their clients. Russell Investments' third annual Value of an Adviser Report says an adviser can add 5.2 per cent or more per annum in extra value through investment and asset allocation advice, as well as providing guidance on tax-efficient strategies, and additional wealth management services. 

“We know some clients can experience sticker shock when they see advice fees for the first time," says Bronwyn Yates, Head of Business Solutions at Russell Investments. "Our report shows advisers can play a critical role in helping investors avoid common behavioural tendencies and may potentially help their clients achieve better portfolio returns than those investors making decisions without professional guidance.” 

Despite the value-add of professional advice though, independent investing is on the rise, according to research by ETF provider GrantiteShares, which shows a sharp spike in individuals trading shares. Since the Coronavirus crisis started, 15.5 per cent of people in the UK who own shares claim to have started buying and selling more, and 3 per cent of the adult population – over 1.5 million people – say they bought shares for the first time. 

"This trend has been fuelled by a combination of factors including increased volatility in the markets, people having more time on their hands as a result of being furloughed, and, in some cases, an alternative to betting on sporting events, which had been cancelled," says Will Rhind, Founder and CEO of the short and leveraged ETP specialist.

And finally this week, in our latest guest article, Oliver Woolley, the CEO of digital investment platform Envestors, addresses some of the common myths surrounding regulation in early-stage investing and explains why accelerators, incubators, and networks matching investors and startups, all need to be regulated…

Wealth Adviser
 

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