Responsible Investment Strategy: It Takes Two

What to consider when choosing the right asset manager to guide your responsible investing portfolio.

Canadians increasingly want their investments to deliver social good and financial returns. Building a winning responsible investment (RI) portfolio can be more complex than conventional investing, so careful investigation is required to ensure your desired portfolio meets the litmus test of your ethics.

“Before picking a responsible investment product, you’ll want to define what responsible investing means to you,” says Chris Gerow, CFP. RRC, RIS, senior wealth advisor with Island Savings Insurance Services. “Reflect on your core beliefs and the causes you’re passionate about. This will help you align the asset manager’s investment process with your personal values.”

Gerow recommends looking for an asset manager who has a track record in the responsible investing space. This will demonstrate a history of investment selection, company divestment and corporate engagement.

When choosing an asset manager, it is important that the investment selection process is transparent and consistent. Investors can view these processes through the financial institution’s responsible investment policy and the investment prospectus. 

“In addition to screening companies, asset managers can have a positive impact through corporate engagement,” Gerow says. “This is done by leveraging share ownership to encourage better environment, social, and governance practices through dialogue, voting proxies, and shareholder proposals.”

Of course, the bottom line is all about performance. “In addition to the responsible investment screening process you’ll want to pick an asset manager with experience generating competitive returns over time and through different market cycles,” Gerow says. Many investors are challenged to find the time to build their knowledge of responsible investing and to review asset managers. Gerow recommends finding a certified responsible investing advisor to help you navigate the responsible investing landscape and find an asset manager that aligns with your values.

“Investors will want to choose an advisor who has experience with responsible investments and has worked with a variety of asset managers,” he says. “You can also ask the advisor how they educate themselves on the responsible investment products and how they stay current on responsible investing issues, keeping in mind the responsible investing screening process could potentially be quite different between managers.”

Island Savings Insurance Services is a division of First West Wealth Management Services.

Learn more about Island Savings Insurance Services and responsible investing at
www.islandsavings.ca/invest/responsible-investing. Follow Island Savings Insurance Services on Facebook @islandsavings | Instagram @islandsavings | Twitter @island_savings 

Follow author Chris Gerow on LinkedIn