Modern philanthropy made simple - A look at impact investing

Financial Advisory

25 June 2019

AdviceAdvisory DistributorsClientCorporate GovernanceEnvironmentalFinancial AdvisoryPhilanthropySocial


  • Philanthropy is not the same as impact investing
  • It’s important for advisers to engage in the impact investing conversation early on in the client relationship and at every review stage

Key Challenges:

  • Financial planners have differing opinions on the definition of impact investing, clients have varied understanding of impact investing, which all leads to mass confusion
  • Ensuring that a portfolio achieves the clients impact investing requirements is a challenge and true portfolio diversification in this area is only truly available by investing in individual stocks
  • There is a correlation between ESG and SRI investing and market highs. Advisers have to understand if clients are happy with under performance
  • We use too many acronyms in the industry and ESG and SRI are two further examples:

- ESG is environmental, social and governance – investments with an overlay of social conscience but, the main objective is financial performance.

-SRI is socially responsible investing – this goes one step further than ESG by actively eliminating or selecting investments according to specific ethical guidelines.

Conclusions and solutions:

  • Although there are more ESG portfolios becoming available, not many firms have ESG funds within their main portfolios.
  • However, this is a trend not a fad. The under 40’s are very engaged in these products. However, although there’s a lot of noise and potential demand, there is a lack of product in certain parts of the market because it’s genuinely hard to manage a client’s ESG and SRI requirements.


Expert: Tim Brown and Sam Mettrick, Janus Henderson Investors