Home

Upcoming Live Content
Licensee content only
Licensee Content Demo

Introduction
Good [morning/afternoon], everyone. Thank you for joining today’s CPD session. As
professionals in the financial services industry, we are witnessing a growing emphasis on
ethical investing—driven not only by regulatory and policy shifts but also by an evolving client
base that values sustainability and ethical governance.
Today’s session is designed to deepen your understanding of ethical investment principles,
provide actionable strategies for client engagement, and ensure you remain aligned with the
ethical standards expected of licensed financial professionals.
Section 1: What is Ethical Investment?
Ethical investment, also known as socially responsible investing (SRI) or ESG investing, is an
investment approach that considers environmental, social, and governance factors alongside
financial returns. This strategy seeks to align investment decisions with broader values and
long-term societal goals.
There are three primary approaches to ethical investing:
1. Negative Screening – Excluding companies involved in controversial activities (e.g.,
tobacco, weapons, fossil fuels).
2. Positive Screening – Actively selecting companies with strong ESG performance.
3. Impact Investing – Targeting investments in projects or companies intended to generate
measurable social or environmental impact.
The global shift toward ethical investing is not just a trend; it’s a reflection of growing concern
about climate change, corporate responsibility, and long-term financial sustainability.
Section 2: The Rise of ESG Integration
Over the past decade, ESG integration has moved from the margins to the mainstream.
According to the Global Sustainable Investment Alliance (GSIA), over USD $35 trillion in assets
under management globally now incorporate some form of ESG consideration.
Australia is no exception. The Responsible Investment Association Australasia (RIAA) reports
that responsible investment now represents 43% of the total market. This change is largely
driven by:
• Regulatory pressures from ASIC and APRA
• Demand from younger investors and superannuation funds
• Reputation and risk management among fund managers
From a fiduciary perspective, ESG risks—such as climate risk or governance failures—are
material and must be factored into long-term investment strategies.
Section 3: The Role of the Financial Professional
Your role as a financial advisor or investment professional is central to the growth of ethical
investing. Clients are increasingly expecting their advisers to discuss not only performance but
also purpose.
Key responsibilities include:
• Educating Clients: Provide clear explanations of ESG concepts and how different funds
or companies apply these standards.
• Client Discovery: Use ESG-related questionnaires to assess values-based preferences
alongside risk profiles.
• Product Due Diligence: Scrutinise managed funds, ETFs, and equities claiming ESG
credentials—especially given the rise of “greenwashing”.
• Regulatory Compliance: Stay informed of ASIC’s guidelines on sustainability
disclosure and ensure client files reflect the rationale for ESG-related advice.
Section 4: Addressing Greenwashing and Misrepresentation
One of the major challenges in ethical investing is greenwashing—where companies or funds
exaggerate or falsely claim environmental credentials.
To combat this:
• Rely on independent ESG ratings and third-party certification (e.g., RIAA Certification,
MSCI ESG Ratings).
• Review underlying holdings of ESG-labelled funds.
• Watch for inconsistency between a fund’s marketing and actual investment activity.
• Educate clients on the nuances—ethical investing isn’t perfect or static; it’s evolving.
As ASIC has warned, misleading sustainability claims can expose both clients and advisers to
risk. Due diligence is not just best practice—it’s mandatory.
Section 5: Ethical Investment in Practice – Case Study
Let’s take a brief case study.
Client Profile: Sarah, age 38, tech executive, moderate risk tolerance, prioritises environmental
sustainability.
Scenario: Sarah is interested in investing her $200,000 bonus in a way that avoids fossil fuels
and supports renewable energy innovation.
Adviser Action Plan:
1. Conduct an ESG preferences questionnaire to refine priorities (e.g., environmental
focus vs. social).
2. Present options: Green ETFs, actively managed sustainable funds, or direct equities.
3. Review product disclosure statements (PDS) and sustainability reports.
4. Document advice rationale, including alignment with Sarah’s objectives and risk profile.
Outcome: Sarah selects a diversified ESG fund with exposure to clean tech companies. Her
portfolio reflects both financial goals and ethical values.
Section 6: Looking Ahead – Trends and Skills Development
The future of ethical investment includes:
• Stricter Regulatory Oversight: ASIC, APRA and the ACCC are collaborating on
sustainable finance regulation.
• ESG Data Innovations: Advances in AI and big data will enhance ESG analytics.
• Client Engagement: Younger investors will continue to drive demand for purpose-led
portfolios.
As professionals, your CPD should increasingly focus on:
• Understanding ESG metrics and controversies
• Analysing sustainability reports
• Enhancing client communication on non-financial metrics
• Leveraging technology to assess ESG risk exposure
Conclusion
To conclude: ethical investing is no longer optional—it’s a professional and ethical imperative.
By equipping ourselves with the right knowledge, tools, and mindset, we can guide clients
toward investments that reflect both their financial goals and their values.
Let’s continue to grow as professionals who not only manage money—but help shape the future
responsibly.
Thank you for your attention.

Client Care & Practice Regulatory Compliance & Consumer Protection 0.50 CPD Pts
Scalable Investment Excellence

One of the more notable trends within financial advice over the last decade – and the last five years in particular – has been the growing adviser usage of managed accounts.

Arguably the primary driver of this exceptional growth has been their potential to deliver operational efficiencies and superior client investment outcomes.

Another likely factor in this growth is the increasing role played by investment consultants within the retail advice sector, emblematic of a trend towards increased outsourcing of investment capabilities, by advisers eager to spend more time building client relationships, and less time monitoring markets and picking stocks.

The options available to advisers seeking to outsource aspects of their investment proposition continue to proliferate and benefit from ongoing innovation. With new solutions becoming available almost on a daily basis, both existing and potential users of managed accounts are almost overwhelmed by choice.

If we think in terms of a collective ‘investment outsourcing’ space, then it is one that is undoubtedly burgeoning, and this paper sets out to provide advisers with a framework for choice within this space.

Drawing on insights from advisers and investment consultants, its role is to provide advisers with a list of considerations and criteria that can link choices around products, platforms, and professional help, back to business fundamentals, including investment philosophy, target audience, practice size, and client value proposition.

Technical Competence Client Care & Practice Regulatory Compliance & Consumer Protection Professionalism & Ethics General 0.80 CPD Pts
Impact Investing: Perspective Reset

Impact investing is a rapidly growing investment sector.

Estimated in 2022 by the Global Impact Investment Network (GIIN) to already be worth over $1 trillion USD1, and predicted to grow by as much as 9.5% per annum over the next decade2, impact investing has become well and truly mainstream, and as a topic now features more prominently in both media coverage, and in client conversations.

But notwithstanding this stellar growth trajectory, and the undoubted increased community consciousness of environmental and social issues, impact investing remains widely misunderstood. Often assumed to be the same as ESG integration and responsible investing – the reputations of which have been somewhat tarnished in recent times due to concerns about politicisation, greenwashing, and subdued performance – impact investing is in fact its own distinct category of investment.

Characterised by a more robust focus on measurability than other categories under the ESG banner, and subject to financial assessment criteria every bit as stringent and comprehensive as traditional investments, impact investing arguably solves for many of the concerns surrounding ESG investing generally.

Impact investing is underpinned by the intention to generate positive environmental or social impact, alongside a financial return. Within this context, leading impact managers are focused on finding companies and opportunities that truly represent best in class solutions to challenges across areas including healthcare, education, sustainable cities, financial inclusion, and of course clean energy. So rich is the variety of investable impact opportunities, almost every client can be catered for.

But first, it is clear that adviser perspectives on Impact Investing need to be reset.

There remains a hesitancy on the part of some advisers to engage clients on the topic of impact and responsible investing more broadly. Much of this hesitancy – about performance, about compliance, about sensitive conversations – can be put down to false perceptions about client sensitivities, performance, and client risks. As this paper demonstrates, the unique characteristics of impact investing arguably solves for many of these concerns.

This paper is a companion piece to the Ensombl/T. Rowe Price podcast series on Impact Investing. Drawing on frontline insights from 5 Australian advisers operating in the impact space, we hope to reframe the understanding of, and attitudes towards impact investing, with the aim of giving advisers the tools and the confidence to make impact a key part of their offering.

Following the overall shape of the podcast series, this paper will aim to reset adviser understanding across 7 key misperceptions:

• Impact and Responsible investing are the same
• Impact investing requires the client to accept lower returns
• Impact investing lacks transparency
• Impact investing is all about the environment and climate change
• Sensitivities around personal values make for awkward client conversations
• Limited impact options hamper portfolio construction
• Impact investing carries a high risk of greenwashing

Technical Competence Client Care & Practice Regulatory Compliance & Consumer Protection Professionalism & Ethics General 0.80 CPD Pts
Portfolio construction: avoiding bad behaviour

Now more than ever, successful investing is challenging. Investors are constantly required to make high stakes decisions on the basis of increasing amounts of complex, and sometimes conflicting data and signals. Gathering, processing, then distilling all this data to allow timely, accurate decision making can be hard enough for professional investors, let alone individual ‘mums and dads’.

As with all aspects of our lives, when faced with information overload, we rely on mental shortcuts – biases – to help us stay on top of all the decisions we must make each day. But when these biases come into play with our investment decision making, the results can be bad behaviours, and outcomes that have a lasting impact on our financial wellbeing.

The Ensombl Podcast series ‘Behavioural Investing’, addressed this very topic, and concluded that, by grounding investment goals in a client’s personal values, better aligning individual goals with variable and evolving risk tolerances, and constructing differentiated portfolios to reflect these goals and risk tolerances, advisors can create more client ownership and understanding of the investment strategy used for each goal, thereby avoiding surprises, and minimising the likelihood of value destructive behaviour.

Produced as a companion to the Behavioural Investing series, this paper explores the outcomes of the poor investment behaviour that our biases can drive, and examines the ways advisors can better connect values, goals, and risk, to drive better advice outcomes.

Technical Competence Client Care & Practice Regulatory Compliance & Consumer Protection Professionalism & Ethics General 0.90 CPD Pts
Why evolution isn’t helping us

Three basic ingredients will help make you a successful investor: a defined strategy, discipline and time. That sounds very straightforward, but like many activities, putting the theory into practice is much easier said than done.

Humans haven’t evolved into great investors. We generally follow the crowd and naturally avoid risk, which is less likely to lead to outperformance.

Why is this? Historically, it’s always been risky to be the person out on your own. In prehistoric times, for example, everyone slept together in a cave. If one caveman decided to spend a night under the stars instead, the chances are he wouldn’t be coming back in the morning – easy pickings for a sabre-toothed tiger.

Our evolutionary bias is to follow the wisdom of the crowd, escape from danger and avoid discomfort. That’s what has kept us alive, but these tendencies aren’t beneficial when investing and potentially have serious consequences. The tendency to do what other investors are doing leads to buying the same well-liked securities as others, with a ‘great story’ attached, and that have performed well recently. Humans feel comfortable holding those securities, but the downside is that when comfort bias is driving decision making, investors could overpay for the asset.

At its worst, market bubbles form, where later participants significantly overpay for assets and are the biggest losers when the bubble bursts and stocks come crashing down.

Buying and selling at the right price is paramount to investing success. Morningstar’s ‘Mind the Gap 2024’ report1 shows that most investors consistently get this wrong. The Report’s findings include that fund investors earned a 6.3% per year dollar-weighted return over the 10 years until December 31 2023, while their fund holdings earned about 7.3% per year, and that these results aren’t an anomaly, they are broadly in line with the gaps measured over the four previous rolling 10-year periods in prior Morningstar studies.

The Report’s findings also include that the 1.1% annual estimated return gap stems from mistimed purchases and sales.

Investors can fall victim to buying shares that have already performed strongly (following the crowd) then panic-selling when they fall, rather than reassessing the situation. Compounded over time, investors are giving up a substantial amount of performance.

Technical Competence Client Care & Practice Professionalism & Ethics 0.25 CPD Pts
Beyond the Mortgage: Rethinking last Century’s financing structure to Solve the Housing Crisis

Australia has a proud history of innovation, with world-changing inventions like Wi-Fi, Cochlear implants, Google Maps, and Black Box flight recorders all brought to life by tenacious Australians who reimagined problems to create solutions.

Australia has been a fertile ground too, for notable financial market innovations, including:

• The Australian stock exchange (ASX), which has been at the forefront of market innovations, including electronic trading platforms, clearing and settlement systems, and advanced market surveillance technologies.
• The superannuation system, creating one of the largest pools of retirement savings in the world.
• And within the property sector, Australia was a pioneer in developing and adopting Mortgage-Backed Securities.
With it increasingly being the case that individuals and families on a median income are unable to afford a median priced property in major capital cities, can the innovators of Australia develop a new financing model to address the housing crisis? Have debt driven instruments, like mortgages, as standalone tools, come to the end of their useful life?

In this article we’ll look at the factors that have shaped the home buying process over the last century and examine if Shared Equity could also be the next financial innovation that could enable more of the next generation to buy a home.

Technical Competence Regulatory Compliance & Consumer Protection General 0.25 CPD Pts
0/40 Required Points this Year
Technical Competence

0/5 CPD Points

Client Care & Practice

0/5 CPD Points

Regulatory Compliance & Consumer Protection

0/5 CPD Points

Professionalism & Ethics

0/9 CPD Points

General

0/0 CPD Points

Tax (Financial) Advice

0/5 CPD Points

close icon

Are you sure?

Once you delete it, this action can’t be undone.

Ensombl: LMS