UKSIF announces ‘Ownership Day’ to encourage longer term thinking amongst investors

UKSIF, the ‘UK Sustainable Investment and Finance Association’, has announced that they are to launch the first ever ‘Ownership Day’ on March 12, 2013. The intention of ‘the day’ is to focus investor attention on the benefits of behaving like genuine ‘asset owners’ – rather than bystanders.

In these days of intense economic pressure and dwindling natural resources, longer term strategic decision making is essential to business. Investors who operate more at arms length are at best likely to miss important business signals, or potentially direct investee companies down blind alleys.

For organisations which purport to be long term investors ‘Ownership Day’ will present an opportunity to promote their ideas and showcase best practice. For most however it will offer a chance to examine how well their current strategies serve their own longer term business ambitions and those of their clients.

Yet investment ownership is complex. Different asset types require different approaches and there are often many parties involved. In addition, identifying who ‘owns’ an investment is not easy. In the retail investment market there may be a number of people or bodies who think of themselves as the ‘owner’ of an asset or group of assets – which may not always be useful. The challenge therefore is to encourage all the links in the investment chain to consider how they can improve the liklihood of sustained business success across the organisations they hold – without losing focus on day to day issues.

So what is the relevance of this to financial advisers?

Clients’ anticipated investment terms vary significantly. Few however are less than 5-10 years and many are much longer, particularly in the pension arena. Yet this kind of time period is viewed as an eternity by many fund managers – a view that if known would do nothing to enhance most clients’ opinions of our industry.

What may be more constructive, and help enhance client relationships, is to showcase funds that combine an understanding of short and long term business factors and mega trends. This is likely to put on display different styles of investment management – where fund managers are more actively engaged with the companies they part own. Such managers are likely to be in regular dialogue with companies, actively vote shares at AGMs and work to steer companies in the direction they would wish them to go if they had a personal stake in the business that they were committed to retaining.

To find out more about this initiative you may like to check out the online resources that will be added to www.uksif.org between now and March 12. You may also like to open up discussions of this kind with your clients by asking them to complete the online ‘Stylefinder’ client fact find questionnaire which splits SRI into seven broad styles .  Issues such as these fit comfortably within what the Fund EcoMarket database tool refers to as ‘Responsible Engagement’ funds  – where a number of leaders in this market are listed (see Styles Directory for outline of this strategy)’. Additional links are also available via the PanaceaAdviser Ethical Zone.

Julia Dreblow, founder sriServices.co.uk

24 January 2013