FT Logo

Copy article

FT Editor Banner

Thematic investing and your clients

Journalist: Ima Jackson-Obot, FTAdviser

ended 15. August 2023

Hello advisers.

We recently ran a poll where we asked financial advisers: which proportion of your clients are familiar with the term, thematic investing?

The majority of advisers (97 per cent) said less than a third of their clients were familiar with the term, while the remaining 2.8% of advisers said between 30-50% of clients were familiar with the term.

What do you make of the results from this survey? What's your experience of thematic investing? What's your approach to this style? Are your clients familiar with the term?  

Thanks

Ima

5 responses from the Newspage community

Copy all

Copy

Editor
Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Most clients won't know what thematic investing means. In fact, most advisers won't know the specifics of the term. That's because it's a purposefully woolly, generic concept used for a variety of different strategies adopted by fund managers trying to justify their fees. If your money manager is not thematically investing, then just use a passive fund.
Copy

Editor
Ross Lacey
Director & Independent Financial Adviser at Fairview Financial Management
I don't think most clients would immediately know what's meant by thematic Investing. They would, however, expect any fund manager who offers "active management" to be considering where to allocate money — not just based on individual company prospects but also wider sector or industry trends.
Copy

Editor
Wes Wilkes
CEO at IronMarket Wealth
Sadly, most clients wouldn’t know what a meant by thematic investing and for that matter neither would most advisers. Themes and thematic investing is a really important part of asset allocation and the profession needs to do better at educating more generally about this. Especially when you consider that with the advent of the ETF and the incredible choice available at low cost, having an element of a strategy or a portfolio with a theme on, say, climate change or even AI is something clients would take an interest in.
Copy

Editor
Scott Gallacher
Director at Rowley Turton
Thematic investment is not a new concept. I recall it from my early days in financial services. It was especially popular around the Dotcom boom before it fell out of favour with the subsequent Dotckm bust. However, I'm not too surprised that most clients aren't aware of this particular term.

Thematic investment seems very logical and is extremely alluring. Whats not to love about identifying the current trends and investing to profit from them. However, in my experience, there's been more misses then hits with this style of investment.
Copy

Joshua Gerstler
Chartered Financial Planner at The Orchard Practice
In my experience, most families we look after don't care what their investments are called. They don't care about the jargon the profession tries to confuse them with. If families want to invest in a specific theme e.g. North American technology stocks, then we will find them a fund to do that. However, very few want to try and predict which theme or asset class is going to be the next big thing, and we certainly won't be wasting our time trying to do so. A well diversified global equity portfolio is still the best way forwards for most.