Now that MarketsFlow portfolios are available for retail clients, I think it’s important now more than ever to open portfolios that will attract people based upon their ‘moral compass’. That is, high-return portfolios but also available in the domains of: ‘Ethical’, ‘Green’, ‘Sustainable’ and ‘Islamic’ because these types of portfolios have a lot of appeal for retail clients and will help seal the deal whilst advertising. High returns / growth / income is not enough when people have options in the market that also cater to their moral compass. I suspect it wouldn’t be too much trouble to create these new products but the interest would be significant.
@VishalWilde, I completely agree. The growth in ethical investing has grown massively over the last couple of years, hand-in-hand with the increase in press and media coverage of environmental and other ethical issues. From a personal point of view I would be interested in an ethical portfolio and like you say, think it would be a useful marketing tool to help MF meet their new customer targets. And the market for Shariah-compliant investing is huge and largely ignored by most financial providers out there.
I believe @tom_mf mentioned on the Crowdcube discussion forum that it was quite easy for MF to create these kind of portfolios using their technology and I imagine it is a short-term aim on the road map.
Glad you think so @JamesWhitt. Yes, I think the market opportunities are huge here and it may well simply be a case of using the same MF portfolios but restricting the stocks they can trade in for each of those those objectives which may well be easily achievable as a short-term aim. The shariah-compliant angle is also important for Muslim consumers both in the UK and USA but also the Middle East and I see it as a no-brainer if we want to gain significant traction in the Middle-East and with those particular demographics in the USA and UK.
The markets for Green, Sustainable and Ethical investing are huge, as you rightly pointed out and, with MarketsFlow, the trade-off between high returns and adhering to one’s moral compass may well be further narrowed which is a very attractive proposition.
I personally think the more products available, the better. Growth and High Growth doesn’t capture my imagination nearly as much as the plethora of products offered by Legal and General for dividing / investing even my pension pot, for example.
Fundamentally, to outcompete the largest asset managers, MarketsFlow needs to account for these diverse preferences when acquiring and retaining clients.
I completely agree - having a Shariah compliant offering could be the key to unlocking the Middle East. There’s also the possibility then of approaching some of the massive sovereign wealth funds as well, who traditionally use the likes of BlackRock for their
portfolio exposure outside of the Middle East.
There have been a few articles recently that suggest millennials are willing to pay more for green. That ranges from transport options, to food, to investing as well. Wealthify recently rolled out the option to invest in ethical portfolios at a higher fee than
non-ethical portfolios and the uptake/conversion was strong. I don’t see it costing too much more for MF, but they could probably increase the fees and produce a bit extra profit.
@tom_mf - aware there are other activities on the go but are these considerations in the pipeline for MarketsFlow alongside other product development activities like the micro-savings account? I think that’d all be well received by a broader audience (especially if we’ll be going straight to retail investors).
very true Vishal and there is a big attraction in MF differentiating from “the herd”, even at this early stage in their development. I’m sure that MF’s story, combined with what they are offering in one or more of these areas you mention, would be of huge interest to some of the more niche financial press.
Just seen this news that Nutmeg is setting it’s sights on ESG:
My pension is invested in four index funds (UK, Emerging Markets, Ethical and HSBC Islamic) and I’ve noticed that my Islamic and Ethical ones have weathered this pretty well compared to the other two. I also think that the fundamentals behind those two (especially in terms of the growing preferences of the target demographics) means that it’d be a real shame if Strowz did not release comparable products.
Thanks @VishalWilde. This has been taken onboard both from demographics as well as product diversification.
Thanks @tom_mf, looking forward to hearing more