For Financial Advisors

For Financial Advisors

Why incorporate impact investing into your conversations with clients:

Respond to increasing investor interest:
According to the US SIF “2012 Report on Sustainable and Responsible Investment Trends in the United States,” 72% of investment advisors stated that fulfilling client demands was the top reason they are incorporating environmental, social, and corporate governance factors into their investment analysis. U.S. Trust’s “2013 Insights on Wealth and Worth” report indicates that 45% of high-net-worth individuals see their investment decisions as a way to express their social, political and environmental beliefs. A boutique wealth advisory firm has doubled its assets in five years since incorporating sustainable and impact investing into its practices.

Maintain and grow assets under management:
According to the U.S. Department of Education, women control 60% of wealth, and their numbers are growing at twice the rate of men’s – prompting estimates that by 2030, women will control two-thirds of wealth in the U.S. In the same U.S. Trust study cited above, 65% of women respondents believe it is important to view investments through the lens of their impact on society and the environment. Of Gen X and Gen Y respondents, 67% agreed with this approach.

Retain and deepen client relationships by helping clients align their values with their investments:
For most clients, wealth is about more than just acquisitive power, investment allocation and tax efficient strategies. According to PNC Wealth Management’s 2012 “Responsibilities and Money: How the Wealthy View Their Role in Society,” 70% of respondents believe that they bear “a special responsibility in society to help the less fortunate.” Furthermore, 83% believe that investing in private business and industry is the most efficient engine of societal improvement. In Deloitte’s Millennial Innovation Survey of 2013, 36% of respondents indicate that business primary purpose is to “improve society,” followed by 35% who indicated “generate profit.” According to an article by Michael Sisk (Barron’s, June 4, 2011), only 2% of children keep their inheritances with their parents’ financial advisor, and with the death of their husbands only 45% of wives keep their assets with the same financial advisor. Over the next 40 years, an estimated $41 trillion will pass from Baby Boomers to their inheritors, creating an important need – and opportunity – for taking a values based approach to investment management.

Present new investment opportunities:
Through TriLinc Global, an early mover investment manager in the impact investing space, U.S. retail investors have access to opportunities that combine the potential for competitive returns with social and environmental benefits.

Generate the potential for higher returns:
A 2013 Harvard Business School study showed that $1 invested in a portfolio composed of “high sustainability” companies (those that voluntarily adopted values-based social and environmental policies) between 1992 and 2010 would have outperformed a control group by 47%.

Resources to Share with your Clients

The following research relates specifically to the importance of impact investing for financial advisors and their clients. Other valuable resources can be found by visiting on our Resources section and Blog.

Adding value(s) to investing
Published by UBS Financial Services
March 2015
This report covers the why, what, and how of sustainable investing, an emerging field of investors and stakeholders that are increasingly incorporating environmental, social, and governance factors into their decision-making.

For Financial Advisors: Enhance Your Practice Through Impact Investing
Published by TriLinc Global
January 2014
In this article, several leading wealth advisors discuss how their impact investment programs have led to growth in assets under management, higher rates of client retention, and a more sophisticated understanding of global risk.

From Ideas to Practice, Pilots to Strategy Practical Solutions and Actionable Insights on How to Do Impact Investing
Published by World Economic Forum
December 2013
The World Economic Forum report disseminates the best practices and lessons learned from the first movers, early adopters and bold innovators in the field of impact investing, with the goal of further advancing the sector.

From the Margins to the Mainstream
Published by: World Economic Forum and Deloitte Touche Tohmatsu
September 2013
The World Economic Forum report highlights the potential of impact investing to generate market returns while addressing key social and environmental challenges. It provides a market assessment and recommendations for how mainstream investors can more actively engage in impact investing.

Navigating to Tomorrow: Serving Clients and Creating Value
Published by: PricewaterhouseCoopers
June 2013
In its 20th Anniversary edition of the Global Private Banking and Wealth Management Survey, PwC found that respondents need to understand their clients better. While respondents are clear that many aspects of their client relationships are effective, key demographic trends (including the rise in importance of Generation Y and women as specific client segments) need to be addressed within segmentation techniques, next generation transition management needs to improve and profitability measurement needs to become more sophisticated.

Millennial Innovation Survey
Published: Deloitte
January 2013
Deloitte’s Millennial Survey revealed that our world’s future leaders are increasingly viewing business through the lens of social impact. More than half of Millennials surveyed (52%) believe business, more than any other area of society, will achieve the greatest impact in solving society’s biggest challenges.

Gateways to Impact
Published by: Calvert Foundation, Rockefeller Foundation, Deutsche Bank, Envestnet, Metanoia Fund & Veris Wealth Partners
June 2012
This report is based on a nationwide survey of 1,065 financial advisors. It provides financial services firms with key insights into the demand among financial advisors for sustainable investment information and products. It offers an overview of financial advisors’ readiness to advise their clients on sustainable investments, and recommends how wealth management and financial services firms can better support their advisors and clients.

Money for Good – The US Market for Impact Investments and Charitable Gifts for Individual Donors and Investors
Published by: Hope Consulting
May 2010
In 2009, Hope Consulting observed that many foundations and nonprofits sought to provide giving and impact investment opportunities that didn’t seem consistent with consumer demand.