Six steps for IFAs to succeed in sustainable investments

Written by George Critchley on 20th Jun 2019

Independent financial advisers (IFA)’s face a number of hurdles when launching themselves into the sustainable investing market, hurdles that can often deter them from helping a client to explore their options in this area.

To help, George Critchley, Senior Partner at at Good Egg company Pennine Wealth Solutions, has put together a step by step guide to meeting clients ever changing needs, with some handy tips for clients on the types of questions to ask.


Step 1 – Conquer the jargon

As the sustainable market has evolved, there is an amazing number of headings created to describe such investments. For example, green, environmental, sustainable, ethical, ESG, and impact. What is the circular economy and what is greenwashing all about? The new IFA needs to do some background reading to get their heads around all of this. It’s not that difficult once you put your mind to it.


Step 2 – Read the research comparing performance

It’s quite common for IFA’s to intuitively believe that sustainable investment performance must be worse than the equivalent traditional. It’s certainly true that the investment universe is smaller. However, many studies in varying markets and over many years show this is not the case.

Research by the Royal Bank of Canada would be a good place to start.Ultimately, though, there is no definitive proof that either sustainable or non-sustainable investments outperform. As many sustainable investments are based on new technologies, good corporate governance, and solving modern problems, there is an argument that in the future they should outperform.


Step 3 – Utilise the Pennine Wealth client survey

We developed a survey IFA’s can use with their own clients. Results have been startling. This survey can be downloaded from It’s FREE OF CHARGE. In 2017 we invited three experienced IFA’s to utilise this survey. This is a brief review of the survey and results:

  • 167 clients surveyed with 72 responding (43.1 per cent)
  • Age range 33-81 with the average being 60.8 years
  • 40 males and 32 females make up the 72 responders
  • The survey has just 9 questions
  • A survey sent by letter is much the best way


Step 4 – Research to support your recommendation

We use the 3D ratings compiled by 3D Investing and research to put portfolios together. John Fleetwood, founder of 3D, has made it his life’s work to dig behind the scenes. We soon learnt that many retail investment funds were trying to claim their funds were much better than they actually were. I remember 1 fund with the word ethical in its name that had only 6 per cent of underlying ethical investments!

3D have a 1 to 5 star rating system. This rating comes after all that funds underlying investments have been analysed. ESG focuses on a funds environmental, social and good corporate governance attributes. IMPACT looks at whether an investments main objective is to satisfy one of the 17 United Nations Sustainable Development Goals.

The Positive Pennine Portfolios are rated for both the above factors and the data is part of the monthly fact sheets. An investor can quantify both financial performance and ESG and Impact performance.


Step 5 – Understand impact vs. ESG

True Impact Investments are where the major objective of the firm/investment is to achieve 1 of the UN Sustainable Development Goals. For example, one of these is Good Health and Well-Being. So, a research firm that is developing new bio technologies could be said to have an impact. Firms/investments with strong ESG may trade in non-impact industries. Their major purpose, for example, could be to sell cosmetics or fashion. However, they do this always with an eye on their footprint.


Step 6 – Alter your fact find

The IFA should add several additional questions to their regular fact find. You can decide what these are for yourself, but make them second nature. Opening questions might include: “Would you like your money to help make the world a better place for future generations?”; or “Did you know you could do this whilst still meeting your current and future financial needs?” Or you could ask: “Would you like to understand how your money is invested?”; or “Would you like to know the positive and negative impacts of your investments?”

Here are some examples of questions that you might find an investor asking their IFA:

  • “Is it realistic to expect an investment to achieve my financial goals and at the same time make a sustainable contribution to our society?”
  • “Is it possible for my investment to make a difference to future generations to ensure they can enjoy a healthy environment?”
  • “How do I know my money is being invested in line with my values?”

My message to IFAs is that YOU really can make a difference to our world, and make your business stronger at the same time. It’s easier than you think.



  • The survey works and more IFA’s should use it.
  • The IFA’s were surprised at the results.
  • The IFA’s booked many client meetings on the back of the survey.
  • The response rate is high at 43.1 per cent
  • The subject is emotive to investors.
  • Investors really are concerned about ESG issues: 54 of the 72 responders wanted to invest positively in future, and many NOW.
  • If only 3 per cent of onwards invested monies are in ESG investments, there is a blockage somewhere.
  • The majority of IFA’s are behind the curve: IFA’s are a part of the blockage!


This article is taken from the Good Investment Review of Ethical and Sustainable Funds Spring 2019, your guide to the best sustainable investment funds on the market.


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