IFAs need to become ethically savvy

Fri, 04 Nov 2005

Concerns are growing about IFAs ignoring ethical facts when giving advice to investors . This can have compliance issues if this practice is not addressed.

Helen Barnes, retail investment project manager for the UK Social Investment Forum (UKsif) said, "Ethical investment is still a specialist subject, but is beginning to appeal to a broader audience. IFAs need to be asking questions in the right way as part of their protection and to back-up future complaints."

The comments came after UKsif carried out research that revealed out of all the IFAs questioned, 52 per cent did not find out about their clients ethical concerns when conducting the standard client fact find.

Ms Barnes said the FSA did not pick this up as a problem. "Because the legal concerns of the FSA regarding knowing your client and fact-finding are so broad, they have not highlighted this as an area. We can see that this may not be appropriate in the framework that they have."

She concluded by saying that UKsif had put together a five-step guide aimed at helping IFAs in their fact-finding process for ethical, social and environmental investments .
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