Two thirds (67%) of
investment advisers think that high net worth investors need to
increase their investment exposure to the renewable energy sector
for the long-term and more than half (56%) for the short-term,
according to an online survey conducted by Future Capital Partners
(FCP).
The industry survey, conducted over a number of months, polled
financial advisers and accountants on the topic of investing in
renewable energy. FCP's focussed involvement with the green energy
sector, and the recent attention around the sector as a result of
the Government's feed-in-tariff reviews, encouraged the firm to
explore the market's opinion of renewable investment.
The poll revealed that two thirds (64%) of those investment
professionals surveyed believe that it is a growing industry, yet
they associate it with being overlooked by investors (43% partly
associate and 34% fully associate).
When asked about exposure to the renewable energy sector, more than
a third of advisers (36%) recommended that high net worth investors
had 1% to 5% of their portfolio invested in renewable energy, while
a further 20% believed investors should have a higher proportion at
6% to 10%.
Looking at the individual types of renewable energy investment, the
poll highlighted that financial advisers were most familiar with
investment in solar energy (42% quite familiar and 23% very
familiar) and wind energy (over a third - 35% are quite familiar
and 17% very familiar), while biomass was the area that advisers
were least familiar with (27% very unfamiliar and 21% quite
unfamiliar).
Potentially as a result of advisers' familiarity with the sector,
the audience rated solar energy as most favourable of all the
sectors (23% = very favourable / 56% = quite favourable), followed
by energy efficiency technology with more than half being quite
favourable to the investment sector and 13% being very
favourable.
Piers Denne, Head of Sales & Marketing at Future Capital
Partners, comments:"With the spotlight firmly on the green
investment sector, we felt that this was a good time to explore the
IFA community's familiarity with renewable energy investments at
large. Encouragingly, the survey shows that advisers recognise the
investment potential of this burgeoning sector. However, the poll
also reveals that investment providers and the renewable energy
industry could do more to make investors and their advisers aware
of the uncorrelated inflation-beating returns on offer.
"The poll shows that the solar energy sector is arguably one of the
most high profile sectors within the renewable energy industry and
potentially one of the most favoured. However, it has
suffered setbacks recently as a result of the DECC's cut to
feed-in-tariffs, which highlights the need for the market to look
for alternatives within the lesser known renewable energy sectors.
This U-turn by the Government should act as a warning to investors
and their advisers to look closely at the investment case for
renewable energy and not rely solely on tax incentives."
The industry poll also revealed that the main reason why advisers
are prevented from recommending investment in renewable energy
sectors is because they do not know enough about the investment
products on offer (36%). A further 32% believe there are other more
attractive sectors and 18% agree that they do not know enough about
the sector.
Piers Denne concludes:"The UK renewable energy industry is
benefitting hugely from positive growth drivers as it strives to
meet the EU's targets to reduce reliance on fossil fuels The
industry is also being given a boost by the Government to encourage
investment by offering tax incentives, which can provide downside
protection when using tax-efficient products. All of these factors
build an attractive investment case for the renewable energy
sector. It is with this in mind that we as an investment boutique
focus on proven technologies to create exciting investment
opportunities for clients that are not normally available to
them."