Investment Advisor

Working with an investment adviser can be especially useful if you have a large amount of money to invest. They can help you to develop and implement a Responsible Investment policy. They can help you to identify and select a fund manager. In order to find an appropriate adviser it is important that you are clear about the services you require and know where to go for advice.

Clarifying your Needs

When selecting an adviser it is important to find a service that fits with your charity’s needs.

You may first want to consider:

  • the Responsible Investment issues and strategies that your charity wishes to incorporate into your investments
  • the financial objectives required from investments (such as income levels and capital growth)
  • the level of risk you are prepared to accept
  • the timeframe over which you wish to invest
  • the type of service required and level of involvement you want in the investment process (e.g. execution only, discretionary management, or advisory services)

This information will help you to identify a suitable adviser.

The stage at which you choose to use the services of an adviser may vary. This may depend upon the expertise within your charity, the sophistication of your investments and your understanding of Responsible Investment. It may be useful to see the Developing a policy section and assess the point at which you would need advice.

What to consider

  • there are many financial advisers and it is useful to check their experience of advising the charity sector.
  • many advisers will not have expertise in Responsible Investment. Large established organisations may have access to specialist knowledge and further help, and there are some small companies or individual consultants that specialise in ethical investment advice.
  • some advisers only advise on the products of their employer, or fund managers with whom they have financial links. This may not provide you with the best solution and you should ask if an adviser is independent.
  • some advisers specialise in particular financial products e.g. pensions. You should check that any specialisms fit with your needs.
  • the Financial Services Authority (FSA) regulates the financial services industry and you can check if advisers are authorised on the FSA website.

Finding an Advisor

An OEIC is a company whose business is managing a fund. The company’s shares are listed on the London Stock Exchange, and the price of the shares are largely based on the underlying assets of the fund.

OEICs are open-ended, which means that they can adjust the amount of shares in the fund by either issuing or eliminating shares. If an investor wishes to sell their shares they can sell them back to the fund, rather than to other investors.

Shortlisting an Advisor

The following avenues can be explored when it comes to finding a suitable advisor:

  • Personal recommendations from charities who have been through the process
  • the Vigeo EIRIS website contains a list of Independent Financial Advisers (IFAs) which have experience of advising on ethical investment issues (though not necessarily to the charity sector.)
  • the UKSIF member directory includes the details of a number of IFAs.
  • CAF may be able to recommend lists of reputable investment advisers, though these will not necessarily have knowledge of Responsible Investment.

Some recommendations include:

Further Information

The Financial Services Authority (FSA) is an independent body that regulates the financial services industry in the UK. The FSA regulates most financial services markets, exchanges and firms. It sets the standards that they must meet and can take action against firms if they fail to meet the required standards. Its website includes a register of authorised firms and individuals.

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