The organisation, provisionally called the GIFA group (Green Independent Financial Advisers), was established last month in London.
Geoff Griffiths of Barchester Insurance and Investment, the Salisbury-based advisers that called the initial meeting, says ethical investment advisers have good reason to co-operate rather than compete. 'It is a big market and there are so few people in it,' he says. 'We can afford to be generous to each other.'
'Socially responsible' investment has developed substantially since 1984, when Friends Provident launched their pioneering Stewardship Fund unit trust to a sceptical City. Since then, about 20 funds have been established investing in accordance with ethical or environmental criteria. Several are also available for personal pension and PEP contributions. These funds are estimated to be worth more than pounds 300m.
Nevertheless, as Patrick Meehan of the financial advisers Holden Meehan points out, the range of ethical products is limited. 'They are still less than 1 per cent of the whole unit trust market. However, the good companies are broadening their product range and in five years' time there will be more choice.'
There is evidence that a large percentage of the total money invested in these funds - perhaps as much as 90 per cent - is coming through about 10 specialist green and ethical investment advisers. This suggests that the GIFA group could potentially play a powerful role in developing the market. 'As a grouping, we can put pressure on product providers. We're out there talking to individual and corporate investors, so we've got a far clearer understanding of what consumers want,' Mr Meehan says.
Talk at the first GIFA meeting was of the need for a green with-profits fund for investors who require a less risky alternative to unit-linked funds (NPI is expected to launch a with-profits product shortly).
Also represented at the first GIFA meeting were Kingswood Consultants of Bicester, Cherrill Glavey of Wallingford, Darley Associates of Bromley, and Independent Insurance Consultants of Stockport. Kingswood and Barchester already share a Yorkshire-based representative and have agreed a commission-sharing arrangement between them. 'We're a confederation of soft-nosed salesmen with wood-burning answer-phones,' Mr Griffiths says.
Most of the GIFA members also do a substantial amount of traditional non-ethical investment business. By contrast, Lee Coates, an independent adviser and Fimbra member whose company, Ethical Investors Group, has eschewed the GIFA grouping, restricts himself to purely ethical business. 'I'm not prepared to earn money except from ethical investment,' he says.
He also operates an unconventional approach to the commission he earns, donating 50 per cent of his profits to charities or community groups nominated by his clients - 'everything from CND to Southall Black Sisters'. He says these donations have totalled pounds 20,000 over the past two years. 'Commissions are so appallingly high. I'd like to see commission levels halved. When a financial adviser can very quickly organise a mortgage or endowment and pocket pounds 750 or pounds 1,000, I think it's terrible,' he says.
This is not a viewpoint likely to endear him to other independent intermediaries although he defends the commission system, arguing that a move towards fee-based advice would benefit only the well-off. Ethical Investors Group, which according to Lee Coates has about 500 clients, is run from an office in his home in Cheltenham.
Barchester Insurance & Investment, (0722) 331241; Cherrill Glavey, (0491) 32278; Darley Associates, 081-460 2000; Ethical Investors Group, (0242) 522872; Holden Meehan, (0272) 252874 (also London office); Independent Insurance Consultants, 061-491 5199; Kingswood Consultants, (0869) 252545.
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