Ultra rich want more sustainable investment options to help drive positive change in world: UBS
Super wealthy keen to put funds in financial products that generate returns and do some good, but feel there are few options, Swiss bank expert says
The world’s super wealthy want more out of their investments these days.
In addition to financial returns, they want their money to drive positive change in the world, but the options for achieving both concurrently is lacking, according to a UBS expert.
The Swiss bank, the largest wealth manager globally, was referring to a money-making discipline known as sustainable investing .
Some people like drinking alcohol, some people like smoking, some people like guns, so to tell investors they shouldn’t be doing it because it’s wrong, you’re straightaway not aligning with their values
That is an umbrella term for investing in financial instruments that generate returns from doing good – or simply supporting something that’s not doing bad.
But many of the available investment products marketed as being socially responsible or sustainable just leave out financially risky companies, or firms deemed to be in the business of “vices”.
This was a method that did not resonate with all investors, said Simon Smiles, chief investment officer for ultra-high net worth at UBS Wealth Management.
“It may turn out that you don’t want to invest in tobacco, firearms and alcohol, and so you don’t do that,” Smiles told CNBC in March.
“But to assume that everyone has that same value is inherently problematic.
“Some people like drinking alcohol, some people like smoking, some people like guns, so to tell investors they shouldn’t be doing it because it’s wrong, you’re straightaway not aligning with their values.
“[But] that’s the way a vast majority of sustainable investing products have been positioned.”
Instead of avoiding “bad” companies and investing only in firms with good credit ratings, super-wealthy individuals wanted their portfolios to reflect what they believe in, Smiles said.