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Financial Advisors still need to catch up with their clients when it comes to impact investing

Sep 27, 2019 - Impact Investing, ESG by CCM Invests

The impact/ESG investing industry continues to grow as more investors align their financial goals with their values.  Fidelity Charitable’s 2018 survey on impact investing found that 85% of investors show equal or more interest in investments that have a social and environmental impact than conventional investments.  It also found that younger generations seem to be more drawn to the idea of creating positive ESG impact through investments with more than 70% of Millennials and Gen-Xers already adopting positive impact within their investments. [1]

Although investors have shown interest in impact investing, they still need guidance from advisors to find the right products and managers.  The survey shows that doesn’t seem to be the case – it found that over 41% of financial advisors have not even educated their clients on impact/ESG investments.[2]   Many investors may not even know about these offerings and might be interested if given the information. 

There seems to be a gap between advisors’ behaviors and investors’ mindsets.  We believe advisors that broaden their offerings and include impact investments in their client and prospective client conversations have a greater advantage. As the report states, “This strong consumer interest represents an opportunity for advisors to discuss impact investing more broadly and to deepen client relationships by providing valuable counsel to those who are interested in investing in this way.” [3]

To learn more on the trends, challenges, and opportunities in impact/ESG investing, read CCM’s 1st Impact/ESG Investing Survey here: https://www.ccminvests.com/wp-content/uploads/2019/09/Impact-ESG-Survey-2019-Final.pdf

 

[1] https://www.fidelitycharitable.org/content/dam/fc-public/docs/insights/impact-investing-at-a-tipping-point.pdf

[2] https://www.barrons.com/articles/two-thirds-of-investors-are-worried-about-economic-downturn-or-recession-01569350884

[3] https://www.fidelitycharitable.org/content/dam/fc-public/docs/insights/impact-investing-how-financial-advisors-are-adapting.pdf

 

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