News & Thoughts

Why should financial advisers get involved in social investment?

We believe there are significant opportunities to provide advice to clients in a fast growing social impact investment (SII) market. Increased relational capital built by creating shared value will be the most significant generator of growth amongst wealth advice businesses.

Why should you get involved in social impact investment?

  1. Differentiation

A skilled adviser must show coverage of all available investment options. Showing understanding of SII demonstrates expertise and measurably extends the adviser’s range against competition

  1. Grows relationship capital, building trust and confidence

The successful post RDR adviser will be identifiably client-need focused. This means both being aware of a shift in investor thinking towards investments with a beneficial outcome and also having a solution to offer.

  1. Confluence of factors influencing client-demand

There are three important trends that will influence the investor in favour of social investment in 2015:

  • Popular sentiment about financial institutions has become increasingly negative
  • Unmet social needs are increasingly visible and concerning whilst public sector finance is severely limited
  • Percentage returns are low so that most middle-range investors feel that pure philanthropy diminishes their investment pool, putting their own needs at risk.
  1. Client goals and aspirations leading to the “third pot”

Financial advisers should expect their smarter clients to be aware and to ask them “What about social impact investment? Should I be looking at this?” Some may even say “Should I now have three allocation pots rather than the traditional two pots of investment and philanthropy?”


Social impact investment can inspire a full ranging discussion with established clients and create further relationship-building opportunities.