Six things we learned from our 2021 Ethical Customer Survey Results

A quick summary of the results of our 2021 Ethical Customer Survey
Offshore Wind Farm | Wealthify.com
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Each year, we ask our ethical customers how they feel about our Ethical Plans and what they want to see in the future. This not only helps us to ensure we’re delivering a service that exactly meets our customers’ needs, but it also allows us to focus our attention on their future desires. Of course, we use more than just a single survey each year to drive our progress, which is why we’ve recruited thousands of customers as product testers and regularly run interviews and hold panels to ensure we hit the mark.

We’d like to say a big thank you to more than 2,000 customers who completed our survey, and we’re pleased to share some of the results.

First steps into Ethical Investing

At Wealthify, we love to make it easy for anyone to invest and for them to have some say in how they invest – whether that’s risk level or the choice of ethical investments. Perhaps as a result of this, one of the most impressive figures from our survey is that over 70% of our customers had never invested ethically before the start of 2021.

When asked why they’ve chosen an Ethical Plan, the answers are varied but typically come back to being ‘the right thing to do’, or they are ‘thinking about the future’, and want their ‘money to have a positive impact’.

Whatever the individual reasons are, we’re proud to be able to help our customers make a positive impact on the environment and society.

The environmental impact of our Plans

Our Ethical Plans offer a way to do good with your money, so it came as no surprise that 93% of our customers are interested in understanding the environmental impact of their Plan. For Ethical Investors with an environmental focus, having access to this data can be essential for validating their decision – especially in more turbulent times. 

This is something that we see as being very important to our customers and the mission of our Ethical Investments. Our Investment Team have been actively engaging with Fund Managers to improve how the industry communicates this information back to investors.  While this is likely to always contain more jargon and technical detail, having consistent reporting from companies will make it easier for our team to put it in a language that all our customers can easily digest.

The survey results showed a clear link between those customers keen to understand their investments’ environmental impact and to knowing what companies they’re invested in. This makes sense, as each company will be contributing to the environmental impact of the Plan, so having a clear breakdown of individual companies can be beneficial for investors wanting to make sure their impact is minimal.

Investment Themes

A result that we felt was a huge pat on the back for our team is the majority of our customers fully trusting our decisions on where to invest their money. Only 1 in 4 want to have some level of say over the investment themes their Plan follows.

As ethical investing is often a very personal choice, having a say over these themes make a lot of sense, as you can focus on the niches that are the most important to you – for example, the most popular theme our customers chose as an area of interest was clean/renewable energy.

Whilst people’s interests can be as different as their concerns, our survey found that almost overwhelmingly, the largest concern was around plastic pollution (96.8%). This was very closely followed by climate change (96.5%) – supporting the desire for thematic investing around renewable energy – and modern slavery (92.3%).

The results also showed that only 5.6% of customers would like the option of choosing specific companies to invest in. In addition to this, only 13.7% would want the ability to select their investments from a list of pre-approved funds. This highlights the excellent work our Investment Team has done in delivering strong Ethical Plan Performance over the last three years and their day-to-day work to ensure each fund follows strict ethical guidelines. They are ready to act if those standards were to slip. This forms an important part of our constant monitoring process.

Cost vs Climate

There has always been a balance between being ethical and paying the right price. For many people, their desire to do good often means that they’re happy to spend more money to ensure they receive a more ethical product, but there’s always a tipping point – a moment where the cost outweighs the benefits. Our survey has supported this too.

We work hard to balance this tipping point in our Ethical Plans by providing competitively priced, actively managed funds. Although these funds cost slightly more than our Original Plans, they follow strict quality controls to decide which investments are included and are more ‘hands-on’ as they’re regularly monitored by human analysts to make sure they continue to meet our customers’ needs.

We saw a definitive split between our customers, with half happy to pay more to ensure stricter environmental standards, while the other half would accept a flexible approach with slightly more relaxed standards if the fees were lower.

There was also a relatively even split on customers being interested in offsetting their portfolio’s carbon footprint. However, nearly 5% of our customers didn’t understand what we meant by ‘offsetting’, which is when you compensate for the carbon you’ve created by participating in a scheme that works to reduce the equivalent amount of carbon from the atmosphere. This lack of understanding highlights the issue of clouding the waters by using industry jargon – something we always try to avoid.

Communication is Key

At Wealthify, we always keep our customers in the loop when it comes to their investments. We provide regular updates on any changes we make to their Plans, and more information on the funds that we invest in can be found within the detailed Plan view – either through the app or on the online dashboard.

We believe that this communication is key, and the survey results showed 76.3% of our customers feel as though they get the right amount of information – with a further 23.3% wanting to know even more about their investments. There was a common theme running through the responses too. People want to know more about the individual businesses and projects that they’re invested in, and it’s been great to see this level of engagement.

Every month we showcase an ethical company through our ‘Good Eggs’ blog series, providing a detailed breakdown of a company within their Plans. We don’t just look at the financial aspect either, but instead, dive into what that company does and the positive impact they are having. Following last year’s survey results, we also launched our quarterly Ethical Newsletter, which provides our Ethical customers with a round-up of more ethical-themed content and blogs.

We’ll continue to deliver these updates and will be looking to explore even more ways to keep our customers updated on what their Plans contain – as well as how it performs!

 

With investing, your capital is at risk, so the value of your investments can go down as well as up, which means you could get back less than you initially invested.

 

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