Principles are as important as profits for family savers

Monday, November 5, 2018

  • 49% of savers see the social values of financial providers as important as the returns
  • 27% would accept lower returns to invest with a socially conscious provider
  • 31% of adults opt to save with an ethical investment provider and 24% with a mutual society

Socially responsible investing is becoming more mainstream across the UK, as investors look to balance return with their ethics. Around half (49%) of the population believe the provider’s social values including consistency, reliability, trustworthiness, and treating customers fairly are as important as the potential returns, according to new research from Foresters Friendly Society. 

Concerned with how ethically conscious future generations might be, increasing numbers of parents are spending time investigating alternative investment options for their children. Around a quarter (27%) would accept lower returns to invest with a provider that demonstrates the company values they identify with personally. Comparatively, just one in five (18%) savers do not consider the company’s social values and beliefs when selecting and investing in saving vehicles for their children.

Being inspired by the social values embodied by certain companies, 31% of adults would select an ethical investment provider when choosing products and a quarter (24%) would consider mutual or friendly societies as their top choice.

Taking a look at gender, a consideration into how the industry can help switch on this ethical consciousness among millennial women is needed. Women’s tendency to choose an ethical investment provider appears more dominant with age, as 18% of the 55 and overs opt for this choice, compared to just 11% of men. 

While the wider social and customer benefits are important, financial performance remains key. Potential for growth and security in terms of guaranteed returns are the two most sought-after benefits, with 34% and 33% prioritising these when selecting financial saving products for the children in their lives.

Paul Osborn, Chief Executive for Foresters Friendly Society commented:

“People are increasingly motivated by the potential social and ethical good they can enact and instil in their children, rather than being solely focussed on monetary gains. Awareness and preference of mutual and friendly societies proves benefits that align with people’s values stand the test of time. While fund performance remains important, being reliable and trustworthy is essential and sits at the core of mutual and friendly societies, and these values clearly resonate in today’s world.”

“Securing the financial future of the younger generation is key and being savvy about the investment vehicles out there makes this process smoother. For example, the Junior ISA offers a simple, tax-efficient way to invest for your offspring’s’ tomorrow. Investing early is a great way to give them a financial helping hand for when the time comes for them to make those big life decisions.”