Ignorant advice – customer advisory service for ethical investment funds

Ulf Schrader

Business Strategy and the Environment, 2006, vol. 15, issue 3, 200-214

Abstract: Ethical investment is a growing but still small market in many countries. One obstacle for further diffusion is the lack of information transparency. The actors with the highest potential to improve transparency and to develop ethical funds into mass market products are large retail banks. To realize this potential they have to meet a high service quality standard in their financial advice about ethical funds. Based on a mystery shopping study in Germany, this paper reveals that large retail banks are not yet ready to act as diffusion agents for ethical funds. No advisor demonstrated the initiative to inform customers proactively about ethical funds and some bank employees even falsely denied their existence. Additionally, the scope and accuracy of the information provided was very limited. If banks want to change this situation they can apply a range of strategic, instrumental, and transformational marketing measures. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.

Date: 2006
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