Ethical Investment guide
Ethical investing is a strongly debated subject and with its popularity continuing to rise, there are more ethical investment options than ever before. But should you be putting your superannuation and retirement plans at risk just to complement your moral view? For some who feel very strongly about sustainability and ethical investing it may be a no brainer and while this is a noble attitude I would strongly suggest that you conduct thorough research on your options and have a clear idea on the impact it may have on your superannuation balance and retirement plans.
What is Ethical Investing?
Ethical investing is when an investment is selected to complement your views on social, moral, environmental or political views. Ethical investing can be very subjective so it is important that we thoroughly research an ethical investment to ensure that its investment philosophy aligns with your values.
Typically in Australia, an ethical investment will not be exposed to investments like coal, nuclear weapons, gambling, alcohol or tobacco.
What are the pros about investing ethically?
- Your investment choices may help to create change for the future by limiting investment in businesses that you deem to be non-ethical.
- It may also make you feel good about how you are investing your superannuation and you will be contributing to businesses that you believe are having a positive impact on the environment, communities and society.
- With more and more people choosing to invest their superannuation in ethical investments it has led to an increase in ethical investment options available and also reduced the costs of these funds.
What are the cons about investing ethically
- Investing ethically may impact on the returns of your superannuation and the balance you have at retirement so it’s important to know how this could effect you in the future.
- Ethical investing can be subjective so it may be difficult to find an ethical investment that fully aligns with your values.
- Typically, the fees to invest in an ethical investment are higher than a normal investment.
How do I invest my superannuation in an ethical investment?
Many super funds now have ethical investment options available. If your super fund does not offer an ethical investment option then you will have to rollover your super fund to access an ethical investment. However, before you go and switch your super into an ethical investment I strongly recommend that you consult with a Financial Planner. A good financial planner will help you select an ethical investment that has a good performance outlook, has low fees and complements your moral views. They will also show you how the change of investment may impact on your superannuation balance and retirement plans. From here you will be informed and empowered to make the right financial decisions for your individual circumstances.
If you would like to discuss your superannuation with our expert financial planning team then please don’t hesitate to contact us and book in a free 1 hour consultation.