Castlefield clients at the forefront of ESG
2022 sees Castlefield celebrate its twentieth anniversary. In this piece, Olivia Bowen looks back at her career (which started at a similar time) and recounts how the world of ethical investment has progressed and how our clients are still at the forefront of ESG*
When I graduated from Manchester University I didn't know what I wanted to do as a career, but I knew it was important to me to work for an organisation with an ethical focus. I was working at Levenshulme job centre - which I did find interesting given my Social Policy degree - when I saw an advert for an administrator at an ethical financial advice firm locally. Happily, I was given the job at the GAEIA Partnership Limited (‘GAEIA’ - which stood for Global and Ethical Investment Advice) by Brigid Benson. I was interested to learn about pensions, mortgages and investments as I knew they would be really useful for my own life even if it didn't turn into a career. Like many young people, I hadn't been taught finance at school and didn't even really know what a Financial Adviser did!
It took me three years to do my threshold exams (a few more followed in due course!) and I really enjoyed learning about all aspects of the business during that time - from commission reconciliation to compliance, as well as the more technical side of financial advice - but best of all was getting to know our clients, many of whom are still with us today. We shared a world view - that of trying to ensure money leaves a positive imprint on the world and that wealth isn't created from the misery of others.
I knew it was special and was so proud of the company that Brigid had created back in 1992. Not only were we apparently the first financial adviser firm in the UK to have a website, thanks to Brigid's genius of a husband Philip, but also there were very few financial advisers in those days who had embraced ethical investment as a bona fide way of structuring clients’ assets.
We also supported the ethical banks and building societies - the likes of Triodos Bank and Ecology Building Society - and sought out the handful of mortgage lenders who were offering green mortgages (either reduced rates for buildings with environmental features or planting trees for every mortgage taken out). When it came to giving protection advice - and we still do this today - we looked not only at the features of the policy we are recommending, and the price of course, but also the insurer and how they operate. Are they a mutual? Do they support ethical investment within their investment range? What's their corporate social responsibility like? What support do they offer those who may have to make a claim on their policy? So, it's not just about ethical investing – you can make ethical choices for your money across the board.
Looking back, it's even clearer to me that what we were doing and continue to do is very special. Our clients were among the first in the UK to adopt investment into renewable energy. In those days big institutions and investment managers were not investing - it took the commitment and appetite for risk of clients like ours who were willing to invest small sums in what could often be high risk projects, knowing they could potentially lose the value of their investment. They proved to the wider financial services industry that investment in, for example, Renewable Energy and Social Housing works.
Skip forward several years, and having teamed-up with our sister company Castlefield Investment Partners (CIP) in 2011, our clients have a great range of institutional** funds to choose from - who no longer have to risk capital in the way they did in the early days to seek change.
There are now social housing bonds available to institutional investors such as Castlefield that support the building of homes for people with learning difficulties for example. One of the early examples of this was set up by Mencap called Golden Lane Housing and again, our clients were early adopters.
Celebrating 20 years of Castlefield
This year we’re celebrating Castlefield’s 20th anniversary - which is about as long as I've been in the industry. We've come such a long way - we have a thriving and diverse team with Fund Management, Discretionary Investment Management and Financial Advice all under one employee-owned roof. I know Brigid is proud that the business she started in a spare room at her home has now flourished as part of one of the leading responsible investment firms in the UK, where the needs and objectives of both co-owners and clients can flourish.
When John Eckersley – still our Managing Partner – set up Castlefield in 2002, he was very clear that he wanted to create a firm with an inclusive culture, and that commitment led the way to our now almost entirely employee-owned company (virtually all of the shares not owned by Castlefield employees are owned by a grant-making charitable foundation).
Many of our ground-breaking clients from the early days remain with us and we have taken on many more as responsible investment has grown in stature. It is particularly gratifying to see that the financial services industry itself has finally embraced responsible investment. At Castlefield we’ve always had a unique approach to looking after money, helping our clients to define what ‘ethical’ or ‘responsible’ investment means to them. As one of the early pioneers, we’ve often been called an authority on the subject – that’s why we’re known as “the thoughtful investor” ®.
It used to be that I would go to industry events and on explaining that I was an ethical investment specialist would be largely patronised by the other attendees. One of the common misconceptions faced was that you could either have funds with strong investment performance, or have funds offering ethical investments. But the pandemic taught us that it’s simply not the case. As a result, in recent years I've been met with much greater interest. Other financial advisers and investment managers have wanted to understand more about what we do and how we do it.
Whilst we're delighted that responsible investment is finally being taken seriously by our industry, there are concerns, of course, that many are jumping on the bandwagon and aren't doing it properly – a.k.a greenwashing. This in turn is bound to lead to some funds and investments not living up to their promises and subsequently giving all forms of ethical investment a bad name.
At Castlefield we know better. From our decades of experience and strong team, we know what makes an investment responsible or sustainable or ethical or whatever other term you want to label it with. That’s why we developed our proprietary B.E.S.T. methodology, as it was clear we needed a robust investment process that went beyond the ethical standards operated by many within the sector.
We have a clear view of what Thoughtful Investment means to us - naturally informed by conversations with our clients over many years. Our clients are a fantastic source of inspiration, as they are generally well-versed on all things ethical and share a common interest of using their money to do good. This is a shared value reflected throughout Castlefield and is our ultimate core mission.
Many of our clients retain that pioneering spirit that we witnessed so clearly in the early years of ethical investment in the UK, and we will continue to provide a home for those clients who want to advance further the conversation about what responsible investment really means.
As we start the next twenty years of the Castlefield story, we’ll continue to be deliberately different and push the boundaries to achieve the highest possible standards, so our clients can be confident that their finances truly reflect their values.
*ESG – Environmental, Social and Governance.
** institutional – large scale investments, often cheaper to buy, that can be bought at scale, with large minimum investment levels. Whilst beyond the reach of retail investors (I.e. our clients buying directly), institutional investors – such as CIP – can buy one “tranche” for many clients at the same time, thereby providing access to our clients via their CIP portfolios.