Last week a new study called Gateways to Impact was released. Through the collaborative efforts of Calvert Foundation, Rockefeller Foundation, Deutsche Bank, Envestnet, Hope Consulting, and Veris Wealth Partners, the study aimed to address the current sentiments, obstacles, and solutions of financial advisers interested in impact investing (although it became clear that even the name impact investing is up for debate). The report contained a great deal of useful insight into the language, motivations, demographics and perceived costs and benefits for financial advisers when it comes to impact investing. I very much encourage any one interested in impact investing to look through it. In addition to providing great information, I feel the report sets the stage for more research and problem solving better aimed at the true needs of financial advisors. In this aspect lies the greatest value of the report. Here’s an example of what I mean.
In each section of the implications, the report makes abundantly clear that there is a need to make financial advisers more knowledgeable about impact investing. According to the report, financial advisory firms should provide guidance to advisers on how to build their expertise, financial advisers should actively seek to become more knowledgeable, and field builders should increase the levels of education on the market. When I read this, several questions immediately came to mind. Where are financial advisers suppose to obtain this information? Sure we can find dozens of opinions on what impact investing is, but there is a lack of concrete data on impact investments and no proven procedure on how to manage them. In addition to where, how are financial advisers suppose to get this information? Is it their responsibility to pull together what little information exists themselves? Is it the responsibility of the financial advisory firms to provide information to individual financial advisers? Should a separate third-party organization specialize in educating advisers on impact investing? Is it up to the field builders to develop ways to spread and teach in addition to collect and interpret data? Speaking of field builders, the report lists several topics that field builders should focus on when conducting research, but fail to identify how. “Easier said than done,” comes to mind.
admittedly, my first read left me quite frustrated. I left with more questions than answers. But as I stated before, this narrowed focus on which questions are most pertinent to advancing impact investing is where the real value of this report lies. The point I would like to make is that there is still a great deal to be done in developing and spreading knowledge on impact investing. There are gaps in the field and huge opportunities for financial advisory services or third-party organizations, especially in the education space. The demand is made quite clear by the Gateways to Impact report, and I hope the report has sparked the motivation to address this demand. It will be interesting to see who steps up to fill these gaps, and how they do it.
But why wait for someone else? Lets get started right here. Any suggestions, tips, or thoughts on the questions I raised above or any other questions the report raised? Leave a comment or shoot me a tweet @R_Steinbach.
I’d like to thank all of the organizations that contributed to the report. Be sure to follow Calvert Foundation @Calvert_Fdn, Rockefeller Foundation @Rockefellerfdn, and Deutsche Bank @Deutsche_News.
Until next time, see you out there.