Last week’s Financial Planner Life podcast took a deep dive into the world of symbiotic wealth management, with insight on how allocating to the Global Returns Fund is an easy way for clients to adopt Symbiotic Wealth Management. This article talks us through the how’s, why’s and what to do next? Brought to you this week with particular thanks to guest Yan Swioderski for his expert knowledge and insights.
We all know that wealth management must adapt to the Climate Crisis. We also know that financial planners must innovate to maintain a responsible public profile. For both these challenges, embracing sustainable investing is only the first step. It’s time for a true breakthrough.
Symbiotic Wealth Management means pairing investments with a small allocation to climate not-for-profits. While not-for-profits don’t generate wealth, they do regenerate the planet beyond the capacity of sustainable investing alone. They therefore protect wealth and offer a critical complement to any sustainable investment portfolio.
For clients, Symbiotic Wealth Management is the future of successful investing. For financial planners, it’s an easy way to make employees and the public proud. After all, when it comes to corporate social responsibility (CSR), employees and clients are constantly asking the same question: What’s next?
Yan Swiderski, Co-Founder of the Global Returns Project tells us what’s next.
Sustainable investing: critically inadequate
In the face of the Climate Crisis, wealth management must innovate to protect medium and long-term returns. The actual and projected costs of climate change already render traditional investment strategies untenable.
Many investors and advisers understand this reality and have embraced sustainable investing as a result. By some estimates, global sustainable investing assets already total $35.3 trillion.
As a response to climate change, however, sustainable investing has two serious shortcomings. First, studies increasingly identify a gap between ESG funds and their environmental impacts. But sustainable investing’s second shortcoming might be even more significant.
Even an effective, transparent approach to sustainable investing would fail to implement many critical climate solutions. As a market initiative, sustainable investing cannot fund non-market solutions – solutions that often tackle systemic issues. These include suing polluters, protecting rainforests and defending carbon-sequestering whales. Without these interventions, we can neither mitigate climate change nor protect medium and long-term investment returns.
Clients and employees ask: what’s next?
ESG’s uncertain impacts are not the only incentive to innovate. Financial planners must increasingly demonstrate climate leadership and creativity in order to maintain their competitive advantage. Staying ahead of the CSR curve is crucial for recruiting talent and impressing both clients and employees.
Let’s look at the facts. A November survey of European individual investors found that 89% considered sustainability ‘a challenging issue for society’. 71% planned to increase their ESG investments over the next year. A December surveyfound similar results in the UK: 75% of UK financial advisers described an increase in sustainable investment enquiries from clients. As clients become increasingly climate-conscious, financial planners will need new ways to stay ahead of the pack.
But clients are not alone in pressuring planners to innovate. A June 2021 survey found that 84% of employees in five countries were more likely to work for a company that ‘stands up for’ environmental issues. In the UK, almost 60% of employees ‘are more likely to be engaged at work if their company participates in CSR and/or charity initiatives’. Recruiting and maintaining talent depends on demonstrating company values.
Symbiotic Wealth Management
This is where Symbiotic Wealth Management comes in. To adopt Symbiotic Wealth Management, an investor allocates a small amount to not-for-profit organisations tackling climate change alongside their other investments. Not-for-profits tackle the fundamental problems that sustainable investing cannot address. While these organisations do not deliver financial returns, they do deliver ‘Global Returns’ – that’s our term for the enhancement and protection of the biosphere. These returns are real and identifiable. And all our investments are less risky when we enhance and protect the biosphere.
For forward-thinking financial planners, embracing Symbiotic Wealth Management is an opportunity to stand out from the crowd. Planners who endorse Symbiotic Wealth Management demonstrate climate leadership to clients and employees.
How does it work?
At the Global Returns Project, they apply a rigorous investment mindset to not-for-profit initiatives. They have assembled a portfolio of powerful climate not-for-profits which they call the Global Returns Fund. Selecting each not-for-profit using a detailed and consistent methodology. Every six months, that methodology is used to review the portfolio again, drawing on their Technical Advisory Board’s climate expertise.
Allocating to the Global Returns Fund is an easy way for clients to adopt Symbiotic Wealth Management. Most participants start at an annual allocation of 0.25% of savings and investments, but the amount is entirely up to them. As a UK registered charity, the Global Returns Project does not charge any fees at all to financial planners or their clients. 100% of a client’s allocation goes to the not-for-profits in the Global Returns Fund. Allocations made by UK taxpayers may be eligible for Gift Aid and highly tax efficient.
The Climate Crisis demands innovation. It’s time for investors to reimagine their asset allocation strategies. It’s time for financial planners to reimagine corporate social responsibility. Symbiotic Wealth Management tackles both these challenges, and the Global Returns Fund makes implementation easy.
Did you miss last week’s podcast on Symbiotic Wealth Management with Yan Swiderski?
- Yan’s career journey
- Who do the Global Returns Project work with?
- How all businesses can meet their net-zero targets
- A deep dive into Symbiotic Wealth Management
- The future of the Global Returns Project