Speaking of funds, there are now more than now 285 sustainable and impact mutual funds and ETFs available to U.S. investors—from long-time socially-responsible mutual fund providers such as Calvert, Parnassus, Pax and Ariel, to fund behemoths like Blackrock and Fidelity, to emerging managers like Green Alpha Advisors.
Spend More Time With Family: Advisors have found that engaging multiple generations on impact investing—particularly through philanthropic vehicles—can be a great way for families to begin to instill philanthropic values in their children and grandchildren. It is one way to bring them into the conversation about options for investing for impact and making grants to charities aligned with their values.
Together, families can pursue opportunities to make deeper impact investments available. Investing with private equity fund-of-funds or short-term impact debt fund using philanthropic capital has been available through a few donor-advised funds.
Learn A New Skill: With experience and careful research, advisors can add a new offering to clients in 2019 by developing an expertise in more complex investments on behalf of clients, including private debt and equity funds or direct investments in companies and non-profit organizations.
The IA 50 is one resource for private debt and equity funds. This annually updated list is a gateway into the world of impact investing for investors and their financial advisors, offering an easy way to identify experienced impact investment firms and explore the landscape of potential investment options.
On the direct investing side, ImpactAssets and RSF Social Finance are two organizations advisors can tap to provide clients with access to direct investments into private mission-driven businesses, impact funds and nonprofit organizations.
As impact investing continues its growth and acceleration into the hearts and minds of your clients, advisors may want to consider the wisdom of this Chinese proverb: “The best time to plant a tree was 20 years ago. The second best time is now.” Advisors, now is the perfect time to make a resolution to add impact investing to your practice offerings in 2019.
Scott Nance, CAIA, is the head of business development at ImpactAssets, a nonprofit financial services firm that increases the flow of capital into investments the deliver financial, social and environmental returns.