There have never been so many Britons striving to look after the planet at the same time as they look after their finances, with the sums invested in ethical unit trusts having grown from £3.1bn in 2004 to £5.7bn today.
Every week seems to bring a new "green" product launch – from credit cards to mortgages. And in such a burgeoning market, consumers are keen to know whether an ethical financial product is right for their personal circumstances and whether it actually does what it says on the tin. In other words, is the ethical tag justified or is it just a sales gimmick?
This is where those professional advisers who spe-calise in the ethical sector are meant to come in. At the moment, though, there is no way they can prove a knowledge of ethical products, which can make it difficult for those looking for advice to separate the genuine specialists from others who may regard this type of investment simply as a business opportunity.
"There is a crying need for an ethical advice qualification," says David Elms, chief executive of Independent Financial Advice Promotion (IFAP). "There are more than 50 industry-wide qualifications available and not one of them is there for consumers with an ethical outlook."
The IFAP website, www.unbiased.co.uk, in its "find an IFA" section allows advisers to choose nine "specialisms" from a list of 25. The numbers of advisers ticking the ethical investment specialism box has risen from 630 in 2005 to more than 1,000 in 2007. According to Mr Elms, this underlines increased interest in all things ethical as advisers have to forgo ticking some core product areas in order to flag-up their green know-how.
Consumers can also look to see if an adviser belongs to the Ethical Investment Association (EIA), a professional organisation that runs quarterly investment seminars to further its members' knowledge of the sector. But the EIA has just over 60 members, a drop in the ocean compared to the advice market as a whole.
Another problem for people on the outside wanting sound advice is that IFAP does not recognise the EIA because its members' ethical knowledge cannot be tested by an industry-recognised exam. Similarly, the EIA is concerned that no checks are made on the commitment to the ethical cause of IFAP members.
A list of green financial advisers can also be obtained from the Ethical Investment Research Service (EIRIS). To qualify for inclusion, advisers must purchase the EIRIS guide to ethical investment. But that doesn't necessarily mean they will have read it.
So where does this leave the conscientious client? The best approach, according to Ian Hudson of independent financial adviser (IFA) Hudson Green & Associates, is to "road test" three different advisers. He points out that every IFA offers a half-hour initial consultation, often for free.
"The key to understand ethical investments is to understand people," says Mr Hudson. "No one client has the same ethical profile as another. If that adviser is doing his job properly, he will be profiling the client."Reuse content