Adrian Nathaniel runs Argonaut Financial in Currumbin Valley, Qld. He speaks to Audacious Investing about his journey to becoming an ethical investment advisor. This Q&A has been edited and condensed for clarity.
Rachel Alembakis: Can you describe your practice and how you came to ethical investing?
Adrian Nathaniel: I was living in an ashram in India in the early 2000s and while I was living overseas, I really got to see the power of money and how it had the ability to impact people in need. I came back and I put together a program for kids helping them to connect with their highest potential thorough outdoor education programs. That was my first little business, but what I realised afterwards was that it was more of a community service or a social enterprise. I began attracting kids that were disengaged from the education system and it was really interesting, because they seemed to be getting a lot of benefit from the program, but unfortunately, they tended to come from disadvantaged families and couldn’t afford the program. I began looking for government sponsorship. Back then, social enterprise didn’t even exist as a term, and impact investing didn’t have the same reach.
I came across this wealthy entrepreneur here on the Gold Cost, John Fitzgerald, who used his wealth to build schools called the Toogoolawa schools. That really inspired me, and I thought, jeez, I needed to learn a lot more about money. That was the beginning of me learning more about money and wealth.
I started as a buyer’s agent, then when legislation around SMSF being able to borrow and invest in property came in, and I began getting a lot of questions from the investors I was working with around using super, that’s when I started the diploma of financial planning, and so that’s also when I discovered, jeez, there’s a lot more to investing and money than just property and so I then entered into the financial planning industry through the AMP program. I started my own business around five years ago, but running all through this is this strong pull for me around the environment and social enterprises.
I live in the eco village in the Currumbin Valley, and because of where I live, I began getting people asking me, what other options they had for super and investing, and that’s when the “aha moment” for me in financial planning hit me. I have to start aligning my financial practice with my values.
I became a member of [The Responsible Investment Association Australasia] RIAA, and started getting their reports, and I noticed each year that the demand for ethical investing was doubling, tripling, almost quadrupling. For me, it’s been a natural, organic progression of becoming aware of who I am and making sure that I align my actions with my values.
Rachel: What are the top concerns/challenges/opportunities to clients when they come to you?
Adrian: I believe this whole movement at the moment is consumer led. People want something different. This has also come out of events like the GFC, where people are starting to question what is actually going on with the financial industry and this thing called money that we use. More and more people wanting to put their money towards something that is meaningful to them.
The challenge at the moment is that with this increased consumer demand, there are a huge number of green products that have become available. There’s a lot of confusion.
This has been pointed out in the last couple of reports from RIAA – a need for clarification around information to make it easier for consumers to make a choice. This is one of the reasons why I put together an annual report around the top performing ethical funds.
There are a number of different things to identify. People want to know how a fund has been performing, they want to know the costs- what are the management costs of the fund – and also the sustainability rating. This is something that’s only really just evolving now.
This is an area which needs to evolve some more. I believe fund managers need to start considering more than just financial return now – more of a triple bottom line, where they are incorporating the environmental and social impacts into the company reporting.
Rachel: What are your clients looking for?
Adrian: Getting advice is really important because there are a number of areas to consider. When I talk to a client, I go through four different areas, and number one is about managing risk. It’s always better to construct a portfolio that’s tailored to individuals’ needs, risks and value profile. Number 2 is the affordability, Number 3 is the sustainability rating and number 4 is the performance. There are a lot of factors that need to be considered and getting advice can potentially not only save thousands of dollars but also help you get better performance as well.
Rachel: What would you like your clients to know about ethical investing?
Adrian: Whenever I see a client, I talk about the triple bottom line. This is going to change the culture around money and around our relationship with money. Ultimately, the triple bottom line leads to better performance, for instance, if a company is considering their carbon footprint and they may look at their power usage, this is one little thing that could reduce their costs and then, if a company starts investing into their workforce, they’re going to get better efficiencies. There are so many studies out there showing that companies that are not taking a sustainable approach will fall behind.