If impact investing is going to grow then it is critical that the right people are on board and providing advice that is beneficial to the sector. Here’s who the gatekeepers are…
It won’t come as a huge surprise that most investors get their impact investing advice from advisors that they are already familiar with. In 2010 Hope Consulting found that 27% of investors will go to their advisor, followed by 12% to the internet. Other research has highlighted the role of other investors as a source of deals, but this is not covered in the Hope report (unless it’s included under ‘Friends and Family’).
Hope Consulting: Money For Good
These findings were also replicated in a recent Spectrem report. This report found that 48% of investors go to their financial advisor first, then 25% will use the internet.
As a sector this means that advisors hold the key to connecting social enterprises with sources of capital. However, advisors are unlikely to take interest until their clients are demanding access to impact investment opportunities. At this stage it seems that the demand for opportunities is very much limited to high net-worth individuals and highly active philanthropists looking for other avenues.
What will it take to move impact investing into the minds of the mainstream average investor? Everyone is aware of their ability to donate to worthy causes, but they aren’t aware that they could actually be doing more with their money. While impact investing won’t supplant charity, surely many people would be interested in the opportunity to recycle their capital and probably receive a return on their investment. I’d be interested to learn of anyone who is aware of any attempts (successful or otherwise) to broaden the knowledge of impact investing to mainstream investors?
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