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Lee Robertson: Life companies should push their social investment credentials

Perceived a ‘new’ phenomenon, social impact investing has been around for centuries. Reminding the public as much could help rebuild trust in our sector.

Lee RobertsonI had an enjoyable meeting last week with an old friend and client, who works at a senior level within financial services.

Among many other things, we covered the demutualisation and merging of traditional life companies, the confusion felt by many in terms of the services we offer, and the need for the public to understand they have to engage with us to ensure they are well protected throughout their lives despite the mistrust of certain brands and government tinkering, particularly when it comes to pensions.

We also touched upon social investment and how this “new” approach is developing, with good work being done by the Social Investment Academy and with governmental support at Treasury level.

Social impact investment opportunities are beginning to appear on the radar of both clients and advisers, with more leading investment firms launching products in the area.

But is it such a new initiative? This style of investment has actually been around for hundreds of years in the UK. In fact, surely the original friendly and life assurance companies were the first social impact investment companies?

These companies were formed in the 17th and 18th centuries with the aims of pooling premiums, growing them and covering policyholders against financial hardship long before the establishment of the welfare state.

Looking back, such companies and their aims seem pretty anachronistic.

Insuring Victorian tea drinkers was the objective of the Marine and General Mutual, which is now part of Scottish Friendly, in an era when tea drinking was considered hazardous due to the dangers of Victorian tap water. Meanwhile, providing life assurance to British Empire soldiers to ensure their families did not suffer undue hardship was a key aim of the well-known Scottish Widows.

The protecting of the bereaved and injured was a key element of social impact. But the life companies and asset managers of today continue to do a similar good.

Through their property funds and other vehicles, they build or invest in all sorts of social enterprises like hospitals, roads, bridges, fire stations, military installations and wind farms, as well as regenerate post-industrial areas and such like.

So what, you might ask? I am aware you probably know all this. But does the public? It would be a great idea for some of the larger institutions to remind policy- and unit-holders just what a huge social impact they are making with their premiums and investments.

Investing in UK infrastructure and social wellbeing is admirable and while, of course, such companies are mainly in it for profit, with the demise of so many mutuals they are also helping the country to thrive and survive.

This reconnection with original aims and objectives, and letting the public know as much, could go some way to restoring faith and trust in the financial sector.

An issue for a real marketing mind rather than mine but some food for thought in these troubled times nonetheless.

Lee Robertson is chief executive of Investment Quorum



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