Wealthsimple launches socially responsible investing portfolios in the UK

This story was delivered to BI Intelligence "Fintech Briefing" subscribers. To learn more and subscribe, please click here.Canadian digital wealth manager Wealthsimplehas rolled outSocially Responsible Investing (SRI) portfolios in the UK. SRIportfoliosinvest in companies that make social responsibility a business priority.In Wealthsimples case, the portfolios invest in exchange-traded funds (ETFs) containing securities from global environmental, social, and governance (ESG) companies, sustainable bonds, companies involved in clean energy, and UK government bonds for risk control.The company's fees are the same as for standard portfolios, 0.5-0.7%, but the fees charged by the funds themselves are around 0.1% higher. The minimum investment required is 5,000 ($6,880).Here is why the launch might be a success:Customers want to invest in SRI portfolios.In the UK,60% of investorswant to invest their money to make a positive contribution to society and the environment, and Wealthsimple itself has stated that the launch comes in response to customer demand. Additionally, SRIs are less prone topanic selling, according to Wealthsimple. Therefore, it seems that Wealthsimples new launch will see high demand in the UK market.Wealthsimple has experience with SRI portfolios.The company launched SRI portfolios in Canadain 2016, and half of all its new customers in the country have opted to invest in an SRI portfolio since, the company claims. Additionally, Wealthsimple's Balanced SRI Portfolio saw returns of 13% in the same time that its Balanced Portfolio grew around 15%, indicating the service is already seeing success.However, while there will likely be high demand in the UK for the new service, its long-term success remains to be seen.Wealthsimples experience with SRIs and demand for them in the UK makes it likely that the launch will see an initial success. However, SRI portfolios are often less diverse than standard ones, making them more risky and therefore their returns potentially lower. So, while people may initially choose to invest in SRI portfolios, their loyalty to this choice largely depends on the future satisfaction of returns and pricing from users.Maria Terekhova, research analyst forBI Intelligence, Business Insider's premium research service, has written the definitive Fintech Ecosystem report that:Looks athow the environment in which the fintech industry operates is changing, and what that means for the digitization of financial services.Gives an overview of the main subsegments within the global fintech industry, and discusses which categories have had to adapt to survive, which have reaped benefits from their original game plans, and which new segments have come to the fore in the past twelve months.Outlines the adaptations that incumbent financial institutions have begun making to adjust to an economy that's inevitably shifting to digital, and in which tech-savvy fintechs are increasingly setting the standards.Discusses what the future of financial services will look like as fintech embeds itself into the financial mainstream.Interested in getting the full report' Here are twoways to access it:Subscribe to anAll-Accesspass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensureyou stay ahead of the curve and benefit personally and professionally. >>Learn MoreNowPurchase & download the full report fromour research store. >>Purchase & Download NowJoin the conversation about this story
Click here to read full news..