Has this happened to you? A valued client comes to you asking about impact investing or a new sustainable investing fund, and you are caught flat-footed, not knowing what to say or how to advise the client on this growing segment of investments.
If this hasn’t happened yet, don’t worry, it will. And given changing investor demographics, it will probably happen sooner than you think.
So, in addition to eating less and exercising more, why not start this year resolving to learn more about this new, exciting and opportunity-filled segment of investing? Indeed, interest in sustainable and impact investing of all stripes – from ESG to gender lens investing, microfinance and climate change – is growing rapidly.
Morgan Stanley estimates that money managers already have almost $23 trillion earmarked with an ESG mandate. The Global Impact Investing Network (GIIN) said in its eighth Annual Impact Investor Survey that the amount of money being invested in deep impact (private debt and equity) investments doubled in the last year to $228 billion.
And thanks to demographics, demand will continue to soar. A 2018 public opinion poll by American Century Investments found that impact investing appealed to 49 percent of survey participants, up from 38 percent in 2016. At 56 percent, millennials find impact investing most appealing, followed by Gen Xers and baby boomers at 52 percent and 44 percent, respectively.
These latest numbers confirm a trend that has picked up steam in the past three years. Across the industry, impact investing is reaching further into the mainstream of mass affluent investors, particularly among women and millennials.