Now that impacting investing has achieved buzz phrase status, the next step for financial advisors and their clients is to understand what the heck it's all about and how it can fit into a portfolio.

These and other topics related to this emerging corner of the investing universe were part of the conversation Sunday among the roughly 100 advisors, money managers and thought leaders who attended the full-day impact investing workshop that kicked off the third annual Innovative Alternative Strategies conference in Denver. The conference is hosted by Financial Advisor and Private Wealth magazines.

In a nutshell, impact investing is about doing good while generating some type of financial return. Impact investments can run the gamut from setting up health care clinics in Third World nations to finding ways to provide affordable housing to lower income people in the U.S. to providing clean water supplies in an increasingly water-starved world. Investment amounts can range from pocket change contributions from individuals via the crowd funding movement, to funds open only to accredited investors that invest in social or environmental projects or in companies plying the space.

Financial returns can vary from low single digits to as much as 20% or more, depending on the type of investment-debt, equity or cash-and how it's structured. As for measuring the social impact returns on these investments, well, that's still a work in progress.

But the point is, said several speakers, there's a growing movement-particularly among younger people-to do good, have a positive impact on the planet, and to align their investments, or at least a portion of them, to those goals. It's a slow-brewing, bottoms-up sea change in thought that could potentially re-orient not only the way individuals view their investments, but how companies conduct business as they start to account for the social and environmental impacts of their operations.

And for advisors, engaging in the impact investing space can add value to their practice by helping provide solutions for clients interested in this area. It also can be a differentiator when it comes to attracting new assets-particularly among the Gen X and Y crowds as they accumulate assets and seek financial planning help.

"Impact investing is a way to bring in the next generation [of clients]," said Ron Cordes, co-chairman of Genworth Financial Wealth Management and co-founder of ImpactAssets, which was created as a go-to resource for financial advisors interested in impact investments. He noted that one of big trends he's seen among college-age people he's worked with is an interest in social entrepreneurship and an interest in tackling global poverty.

Cordes said that advisors need to qualify their clients upfront because impact investing isn't for everyone. "The conversation I have is 'if I can show you a way to take 3% to 5% of your portfolio and invest that in a way that's consistent with the things that are important to you, and we can earn competitive financial returns, is that something you're interested in?'

"My experience is that people want to do impact investing, but they want to be convinced they're real investments," Cordes continued. "I think the industry is evolving to the point where there are more viable products with track records where you can say to a client 'this investment has a high likelihood of giving you a reasonable financial return, in addition to a social return.'"

Cordes hosted a panel session with two fund managers-Gil Crawford, CEO and CIO at MicroVest, and Gerhard Pries, president of Sarona Asset Management Inc.-who manage products in the impact investing space. The flagship product at MicroVest, which specializes in microfinance opportunities in developing nations, is its Short Duration Fund, a vehicle aimed at the fixed-income part of a portfolio and that has a targeted return rate of a little more than 3%.

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