Lee Robertson: Is impact investment the key to younger clients?


We talk a lot in our profession about how to look after the financial affairs of the children of our current clients. As clients age, and sadly die, their invested capital is dispersed among the next generation.

This can often present issues for advisers, as we may not know the children so well. They may not understand the notion of face-to-face advice, may not identify with the more traditional grey suit approach we adopt and, of course, may be attracted to online offerings and the trappings of robo.

There is also a fair amount of evidence that points to millennials having grown up with differing values and ambitions. I am a member of a City of London organisation that provides mentoring to young entrepreneurs and what always strikes me when we meet is the almost universal desire to do good. Indeed, many of the fledgling companies I see have a strong social and community bias.

Against this backdrop, I found it hugely interesting to meet with Worthstone recently, which is working hard to decipher the area of social impact investment. It aims to help advisers improve knowledge in this complex area and understand what is available to investors that wish to make a real positive difference with their capital.

Social impact investment is gath-ering momentum due to a number of factors, not least of which is Prime Minister Theresa May’s broader shared society (something that works for everyone) agenda for the UK. The Government Inclusive Economy Unit has established a working group on social impact investment, looking at how to broaden the engagement of the retail investor. One important part of this is drawing advisers to the opportunity and looking at how to get social impact investment into the mainstream educational training process faster. This area of investment aligns so well with the professional values so important to us in the financial planning and investment community.

We continue to hear a huge amount about robo-advice as the mechanism by which the next generation might want to engage but perhaps just as important for that generation are the underpinning values of the businesses they are willing to support.

So considering all this, advisers adopting impact investment within their strategy could help:

  • Grow their business in value by retaining assets in the intergenerational wealth transfer from current clients to their children and grandchildren, as well as attracting new clients
  • Underpin the values and brand of any business, and help the advice industry make a profound difference in society
  • Attract the best young adviser talent now seeking a greater sense of purpose in their employment, providing a secure succession plan and future for the business.

With the impending intergenerational transfer of wealth to millennials, we need to ensure our businesses are well placed to grow.

Impact investment, with its improving credibility and compelling evidence of increasing appeal, could attract this new generation of investors, while broadening our offering and appeal to do a little good along the way.

Lee Robertson is chief executive of Investment Quorum