Advisors often gauge demand based on what clients explicitly request.
That approach works for most investment strategies. If a client wants private credit exposure, they say so. If they want to discuss tax-efficient withdrawals, the conversation is direct.
Impact investing rarely enters the room that way.
Most clients won’t raise the precise phrase. They talk about something else: access to food and housing, nature, faith, supporting businesses in their community. Those conversations come up in passing, often at the edge of a broader portfolio discussion. Because they don’t sound like a formal investment request, they’re easy to move past.
The challenge for advisors is to not let this difference in language become a barrier to the conversation the client is trying to start.
The quiet demand for values-aligned investing
Over the past decade, the language around investing has expanded well beyond traditional asset allocation and performance metrics. Clients increasingly think about their wealth not just in terms of returns, but in terms of what their capital is doing in the world.
Part of the difficulty is that clients approach this topic from very different places, and the language reflects that. Language that clients may use to indicate interest in impact investing includes:
- Causes they already support: Clients interested in impact opportunities often start with issues connected to their philanthropy or volunteer work.
- Education
- Affordable housing
- Conservation
- Food security
- Community development
- Broader social concerns: Others frame the conversation around larger issues they see in the world or in the news. Clients motivated by impact may mention:
- Economic opportunity
- Poverty and inequality
- Financial inclusion
- Healthcare access
- Gender equity
- Industry terms they’ve encountered elsewhere: Some clients arrive having heard pieces of the impact investing vocabulary, which may touch on:
- Catalytic capital
- Blended finance
- Community investing
- Mission-driven investing
- Place-based investing
These are all forms of impact-oriented thinking. But because the terminology differs, advisors sometimes overlook the signal.
The result is a common but flawed conclusion: My clients aren’t asking about impact investing, so there must not be demand.
When advisors miss the signal
This gap between language and action can have real consequences for client relationships.
We’ve worked with advisors who lost long-standing accounts after clients began asking about aligning their portfolios with the values that already guided their philanthropy. In some instances, we’ve seen advisors who were supportive in principle but couldn’t offer a clear path forward, so the conversation kept returning to the firm’s existing strategies. Eventually the family moved a significant portion of their assets to another advisor who could help build a values-aligned allocation.
We increasingly see a similar dynamic with next-gen clients. As younger family members ask more questions about the potential to do more with the family’s investments, those who are left unsatisfied with an advisor’s offerings are more likely to move assets.
Situations like these rarely start as a dramatic break. More often they begin with a few questions that never really get traction; over time, clients look for someone who can take them further.
It doesn’t have to be all or nothing
One misconception among advisors is that supporting impact investing requires a complete portfolio overhaul.
In reality, most clients are not asking for that.
Often, they are interested in allocating a modest portion of their portfolio toward investments that reflect specific themes or priorities. For some clients, that may mean allocating a small portion to aligned causes while maintaining a diversified traditional portfolio. From the advisor’s perspective, the goal is not to entirely replace an existing mandate — it is to expand the toolkit.
Otherwise, the risk is losing 100% of a mandate because you couldn’t support 5% of it.
Listening for the values behind the question
The starting point is not a product recommendation. It is a conversation. Advisors can begin by asking open-ended questions about what clients hope to accomplish with their capital beyond financial returns. Questions such as:
- What issues or causes matter most to you or your family?
- Are there areas where you would like your investments to reflect your values?
- Are there themes or sectors you feel strongly about supporting or avoiding?
- How do you think about the legacy you want your wealth to leave?
These questions often surface insights that do not emerge through traditional portfolio discussions.
A client who mentions climate concerns may not realize there are investment opportunities in climate solutions. A client focused on their local community may be interested in place-based investments or funds that support small businesses.
Once these priorities are identified, advisors can explore how they fit within the broader investment strategy.
The conversation advisors should be having
In the end, the question is not whether clients are interested in impact investing. The question is whether advisors are listening for it.
When clients talk about climate, community development, ethical considerations or legacy, they are often expressing a desire for their investments to reflect their values.
Advisors who can translate those priorities into thoughtful portfolio strategies will be better positioned to serve clients — and to retain them. Because increasingly, the most meaningful investment conversations are not only about returns, but about purpose.
Ben Kramer is senior director of business development for CapShift.
Advisors’ Corner is a content partnership between ImpactAlpha and CapShift. CapShift’s impact investing platform empowers financial and philanthropic institutions — and their clients — to invest in their vision for a better tomorrow. All content is solely for informational purposes and should not be used as the basis for investment decisions.
