In her view it was important that people realised that a sustainable fund won’t always perform better than others and that there will be volatility.
“It was important that everybody realised that and that we can all now incorporate that into our conversations and how we present to people,” she said.
Incorporating sustainability
Kowalski’s top tip for financial advisers who want to do more in this area is to keep it simple and accessible.
“It’s just getting so complicated. It's not about ticking all these compliance boxes, it's more about making sure that your client has a good experience and can do what they set out to do," she said.
“Don't get too caught up in thinking about, ‘Oh, I've got to have a five page long questionnaire that they've got to fill in’ and all the things that make it harder to do sustainable investing than it is to do normal investing."
She explained that it is also important to find a way to talk about it that you are comfortable with.
This might be having a face-to-face or phone conversation about it or choosing to send out a guide. IFAs should choose whatever method of conversation works for them, she said.
“We need to educate clients and we need to make sure they are aware of the opportunities that are available to them. We're actually making sustainable investment a lot more complicated than it has to be,” she said.
UK and EU regulation is a perfect example of this, according to Kowalski.
“It's all intended for the right reasons but this transition period is the horrendously complicated phase. You have to try and put it in a way that the clients can understand it.
“We have to have a certain amount of knowledge, we shouldn’t be dumbing it down. As an industry, we need to understand what all this stuff means but then we have to put that depth of knowledge aside and make it simple for clients.”
Kowalski said another tip for advisers was that every firm should have access to an expert.
“I’m not saying that to promote myself," she said. "There’s a lot to know to really understand this stuff properly. It could be a graduate trainee advisor or paraplanner, for example.
“Give it to somebody who really wants to get to the bottom of it and really does understand and have an interest in it. That helps bring it to life."
She added: “Whether that person then trains the team, or pops into client meetings to do the sustainable investment session, it really helps.
"This is a specialist area, and it should be treated that way."
