Impact investing – follow your heart!


Putting your money where your heart is.

I’m pleased to hear that steps are being taken to research the best opportunities for savers to make a difference with their money. Whether this is the voluntary saving we do into ISAs or the saving we do at work for later life , most of us don’t know where our money goes. This Quietroom video makes that quite clear.

But the good news is that if we did know where our money went and liked the destination – we’d be minded to save more. Again there’s a video Quietroom video about that.

It seems that many of us not only want our money invested better, but would put more money where our heart is.

Finding out who’s doing good stuff

I was pleased to read this FT article over my cornflakes. It looks like two city high-fliers are giving up managing money and taking up researching who’s doing good stuff. The idea is that ordinary people can access good stuff through funds that specialise in good stuff – which is all that we need to know right now.

Of course you can invest directly in good stuff (thanks for the investment to AgeWage) through crowd funding platform, you can employ digital allocators which point your money at the good  stuff (try TICKR) but someone is going to have find the good stuff in the first place.

So step forward Elizabeth Corley and Harvey McGrath to set up the Impact Investing Institute.

The FT tells us that the Impact Investing Institute will not manage assets but will conduct research and press for more funds to be allocated to the sector, particularly from ordinary savers.

It would be nice if they were to put up a website so I could share more. You can get a feel for what’s going on from UK National Advisory Board on Impact Investing

The  NAB spawned this new body as did the Implementation Group of a Government report called “Growing a Culture of Social Impact investing” , which you can download .

There is a short summary of the report here

The problem is no-one knows all this stuff is going on, the Govt report is two years old and so it’s important that all this high level thinking joins up with what is going on at the grass roots level.

AgeWage and Social Impact

It will not surprise you in the least to hear that AgeWage is keen to promote social impact in the workplace pensions and the SIPPs we’ll be working with.

Infact we’re applying for a grant from Innovate UK to help ordinary people find out which of the funds they can invest in – does what – and what the financial impact for them and the social impact for us – would be – by switching investment to a better place.

Of course you don’t have to switch, you can put pressure on the people who manage your money (fund and asset managers). But more easily, you can put pressure on the people who have a duty of care to select the right funds, to do that for you. These people are called IGCs and Trustees and they’re supposed to be our representatives, making sure that we get the opportunity to invest in funds with social impact.

For instance the FutureWorld funds of L&G which you can access at Pensions Bee, or if you are in an L&G workplace pension. I was drawn to these funds by a fantastic presentation by L&G’s CEO – Nigel Wilson, who explained how he wanted the money that was invested in workplace pensions – to be invested for good.

AgeWage reckons that it can play a positive part in lobbying IGCs and MasterTrusts to raise their game and it will – especially if we get the financial help), be able to build support for ordinary people. Just look at what TICKR is doing for ISAs

How we can get involved

Whether it be at the consumer level (TICKR or AgeWage or at the high fallutin’ research level of NAB and the Impact Investing Group), it’s clear that the nature of investing is going to change. People want to invest for good and that doesn’t mean trying to outwit other fund managers to get a better return.

There are organisations like Heart of the City, dedicated to cleaning the City’s act up. It’s encouraging  investing in  fundamentally good things and making sure that badly run investments are turned round by better management coming from better governance.

But there is a world of difference between HOC and its membership and the people featured in the Quietroom videos

Progress also means reaching out to people like Elizabeth Corley and Harvey McGrath so that the people on the ground get wind of their work – and they get wind of the people on the ground!

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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4 Responses to Impact investing – follow your heart!

  1. con keating says:

    One day I will ask you to explain how, if at all, this differs from the financing of numerous institutes by the Koch Bros, or for that matter, Mercer’s financing of Cambridge Analytica.
    A related question – isn’t this an attempt to establish some common moral standard (which of course is normally the realm of the Law) and is it not better if we all follow our own moral codes and compasses?

    • Bernard H Casey says:

      I find myself agreeing with CK here. Remember what Milton Friedman said about shareholder value. The point he was making was, if this were maximised, the investor could than use the gains to invest in charities of his or her choosing. And we might praise Bill and Melinda Gates, but they “gouged” the profits out of us, and then used it for their favourite charities, which might, or might not be ours. We could go further. Warren Buffet makes money. He says there is a role for social policy, but that is not his task as an investor, it is the task of the state. and if we don’t like the state’s social policy, we can vote to kick the government in question out, which is more than we can do for Bill and Melinda Gates.

  2. John Mather says:

    The level of understanding needs also to be more ambitious than a cartoon
    The social impact of of political interference and its disastrous results in creating the economic divide which then results in widespread feelings of being left behind and popularism (even fascism) according to Madeleine Albright A more useful video might be added such as this example

  3. John Mather says:

    At AgeWage if we are to be a force for good then educating users to change a habit such as buying high and selling low by preparing users for say a recession would be valuable.

    Another blog I follow gave the following today. This is looking at where we are going rather than the majority of pundits who “wisely” tell us where we have been. I know which is the more valuable commentary

    One investment trap is having extreme faith in historical statistical norms. This week’s numbers basket has the following negative indicators:
    McDonald’s was the only stock to be up in the Dow Jones Industrial Average
    There were 38% more Puts purchased than Calls
    The Delta Market Sentiment Indicator is bearish, recommending 100% cash
    The American Association of Individual Investors is only 25% bullish and 40% bearish
    The Barron’s Confidence Index favors best quality bonds over intermediate quality, a bearish signal for stocks
    Only 22 of the 72 weekly price indicators rose in the week
    Stock prices are breaking down from triple top formations, a reversal signal
    Of the 25 best performing mutual funds, only 5 are invested in developed markets, 10 in emerging markets, 5 in India, 4 in Latin America, and 1 in China. Of the 10 poorest performing funds, 4 are invested in Natural Resources and 3 are invested in alternatives
    Money Market Funds, particularly institutional funds, and other short-term funds were big beneficiaries of flows
    Source Lipper

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