It has released new research that shows 90% of respondents expect their investments to be managed in a way that is responsible and ethical.

Under new rules, all New Zealand financial advisers will have a duty to put their clients’ interests first. Investments advisers already have the obligation but the new move will capture some KiwiSaver advisers who have not been operating as AFAs,.

Chief executive Simon O’Connor said his organisation thought responsible investment practices were part of that duty.

In its submission on FSLAB, it said: “It is RIAA’s view that under the new legislation, the new code should explicitly clarify this issue that financial advisers must explicitly ask questions regarding a client’s ethical values, and any other ESG preferences.”

O'Connor said those who wanted to fulfill fiduciary duties when entrusted with client money would have to consider how clients would expect their money to be invested in line with their values.

A growing number of clients were becoming sophisticated investors who wanted good investment products that ticked responsible investment boxes, too, he said.

The RIAA survey showed younger consumers were more likely to want to invest in a responsible superannuation savings fund than one that only looked at maximising financial returns.

That data was sourced from Australian consumers but O’Connor said attitudes were broadly consistent on both sides of the Tasman.

He said that viewpoint could come under pressure if markets came off their strong run.

“Very few are willing to say they put their values first and don’t care at all about returns. Where the vast majority sit is they want very good products and providers that fit with their ethics and beliefs as well.”

New Zealand’s big shift to responsible investment had happened, he said, as KiwiSaver providers installed negative screens on all default products.

But over the next year fund managers would find ways to do more than exclusions, he said, including more active ESG work to drive value on investments and corporate engagement. 

There would be more differentiation among managers with nuanced RI strategies, he said, and a much more detailed conversation.

More KiwiSaver providers and fund managers were using responsible investment as part of their marketing pitch. “These conversations are a nice way to get deeper engagement with clients.”