Responsible Investment 2010

Responsible Investment 2010 is the 10th annual Benchmark Report commissioned by RIAA and the 7th report based on research carried out by Corporate Monitor.

Its aim is fourfold: to update figures for the 2009-10 financial year for the various forms and segments of responsible investment; to present analysis of its level of growth (or decline); to show comparisons with the total managed investment market; and to provide a summary of the latest reported overseas figures. For the second year in a row it contains a separate report showing benchmarks for clean technology investment. We have added for the first time a RIAA membership directory to the 2010 edition highlighting the key players in this industry.

Financial Adviser Responsible Investment Portfolios

Figures for this segment were gathered by surveying financial advisers with a declared interest in advice on responsible investment. Of that group, 23 firms responded that they advise on direct responsible investment portfolios which total $1,461 million. This is up 50% from the adjusted 2009 figure of $972 million.

This equates to about three times the level of increase in the Australian sharemarket in that period, suggesting there has been strong growth in the amount of assets invested in this manner. This compares favourably with a decline of 21% in 2009 and 3% in 2008 during the financial crisis; after strong growth of 46% in 2007 and 42% in 2006.

The longer term trend of strong (albeit volatile) growth in this segment indicates that screened direct share portfolios are becoming a more favoured means for financial advisers to meeting responsible investor needs. This is consistent with a broader trend away from managed funds and towards direct equity portfolios in the mainstream finance sector. The trend is most evident within private client businesses that are part of larger financial institutions and banks.

This segment also suffers from under-reporting as advisers that are known to provide this type of service are sometimes unwilling to share what they regard as commercially sensitive information.

A copy of Responsible Investment 2010 can be downloaded from the RIAA website. (http://www.responsibleinvestment.org)

Alternatively, you may download it directly from AdviserVoice.