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Advisors failing to match millennials’ interest in impact investing


23 September 2019 at 4:11 pm
Luke Michael
While almost four in five wealthy millennials in the US have made an impact investment, only around half of financial advisors understand the concept well, new research shows.


Luke Michael | 23 September 2019 at 4:11 pm


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Advisors failing to match millennials’ interest in impact investing
23 September 2019 at 4:11 pm

While almost four in five wealthy millennials in the US have made an impact investment, only around half of financial advisors understand the concept well, new research shows.

A report released last week by Fidelity Charitable found a major gap between advisors’ perceptions of impact investing and the desire of their younger clients to get involved in the practice.

A high proportion of affluent millennials (77 per cent) and affluent Gen-Xers (72 per cent) reported making an impact investment in the past, but just 53 per cent of 175 advisors surveyed said they understood impact investing well.

Added to this, only 49 per cent of advisors believed the practice of investing with social or environmental purposes in mind was a long-term trend.

“While impact investing has grown tremendously over the last several years, this study indicates that there is still a strong opportunity for advisors to expand their knowledge of the sector,” Sarah Gelfand from Fidelity Charitable said.

“Advisors who are savvy about the full breadth of strategies their clients might employ, including understanding the link between charitable giving and values-based investing, will be best prepared to help clients achieve their goals.”

Interest was found to be stronger among younger advisors, with two-thirds (66 per cent) of advisors under 40 years old saying they were personally interested in impact investing, compared to just over half of advisors over 40.  

Overall, advisors reported discussing impact investing with fewer than half of their clients, despite 58 per cent of people expressing interest in investing in companies with ethical, social and environmental policies.

“This strong consumer interest represents an opportunity for advisors to discuss impact investing more broadly and to deepen client relationships by providing valuable counsel to those who are interested in investing in this way,” the report said.                                                                                 

Recent research found the global impact investing market to be worth US$502 billion, with the majority of impact investors (58 per cent) based in the US and Canada. 


Luke Michael  |  Journalist  |  @luke_michael96

Luke Michael is a journalist at Pro Bono News covering the social sector.

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