Tips for financial advisors, small business in Latin America, Ellevest’s women’s investment platform, core characteristics of impact investing



Greetings, Agents of Impact!

Featured: ImpactAlpha Original

How to start a conversation with clients, and other sustainable investing tips for financial advisors. The first wave of financial advisors to offer sustainable investing options may have wanted to change the world. Many financial advisors are jumping on the trend now to keep their clients from bolting. Approximately 300,000 financial advisors in the U.S. alone serve as gatekeepers to the trillions of dollars in assets owned by retail investors, high-net-worth families and institutions. Advisory services have been pressured in recent years by low-cost robo-advisors as well as exchange-traded funds and other passive investment strategies. Their biggest fear is losing accounts when their clients die; more than two-thirds of heirs fire their financial advisors.

A new guide, “Fundamentals of Sustainable Investment,” walks financial advisors through the process of building a sustainable investing practice, from starting a conversation with clients to monitoring clients’ impact investments. The message: sustainable and impact investing is key to client recruitment and retention. “We started as reluctant disbelievers,” one financial advisor told co-authors William Burckart and Jessica Ziegler of The Investment Integration Project. “We’ve since become wholehearted advocates and have built our practice around it – 80% of our new business is in this space.” One appendix shows advisors how to read, and help their clients read, an impact report. The guide reassures advisors they don’t need to know how to measure impact themselves, but do need to know how to request impact reports from their home offices, Burckart says, “so when your client asks you something, you know what to say.” One way to stay current, the guide suggests: read ImpactAlpha.

Keep reading, “How to start the conversation, and other sustainable investing tips for financial advisors,” by David Bank on ImpactAlpha.

  • Mark your calendars for Agents of Impact Call No. 8, with sustainable investing tips for financial advisors from TIIP’s William Burckart and special guests, Thursday April 18 at 1 pm ET / 10 am PT.

Dealflow: Follow the Money

Accion backs local guide CÍVICO to give small businesses an edge. CÍVICO curates local guides for Latin American cities to raise the profile of small businesses. The platform helps 600,000 merchants in Bogotá, Mexico City, and Santiago offer promotions, post events, and reach more than four million CÍVICO users. It also offers merchants payment processing, bookkeeping, marketing and other digital tools. CÍVICO culls public, merchant and user data to analyze community needs and merchants’ financial needs. “Latin American entrepreneurs often lack access to formal financial services and adequate business training,” says Michael Schlein of Accion. “CÍVICO is closing this gap.” Accion backed the company with an undisclosed investment. Check it out.

Ellevest raises $33 million for women’s investment platform. Wall Street veteran Sallie Krawcheck’s online investment platform structures investment portfolios around women’s careers and earning patterns and includes impact investing, financial planning and career coaching. The two-and-a-half-year-old company recently passed $100 million in assets under management. Its latest financing was led by Rethink Impact and PSP Growth, with backing from Melinda Gates’ Pivotal Ventures, PayPal, Mastercard and individuals including former Obama advisor Valerie Jarrett and former Google chairman Eric Schmidt. Here’s more.

Messenger-based financial services company Kudi secures $5.8 million. Kudi launched in Nigeria in 2017 to provide financial services for smartphone users. The San Francisco-based company, a Y Combinator graduate, uses messaging services for mobile banking and payments platform. “Why we chose messaging? Distribution. Nobody wants a new mobile app,” founder Yinka Adewale wrote on Medium. Adewale built Kudi’s digital payments services on top of services like Facebook messenger or Skype and partners with utility, telecom and financial services providers to allow users to pay bills, transfer money and buy mobile phone credit. As of December, it was handling 700,000 transactions per month, up from 28,000 at the start of 2018. Kudi raised $5.8 million, according to an SEC filing. Partech Ventures’ Tidjane Deme will join Kudi’s board of directors. Read on.

Signals: Ahead of the Curve

Core characteristics and operating principles to help impact investing scale with integrity. Investors want to know the terms of participation in the growing impact investing market, says the Global Impact Investing Network. The GIIN’s answer goes beyond its standard definition to include the “core characteristics” of the practice. “Scale is essential,” said the GIIN’s Amit Bouri. “But it must be scale with integrity, to ensure we are achieving impact at scale, not just capital at scale.” The characteristics include: intentionality to contribute to measurable social or environmental benefit, use of evidence and impact data in investment design, management of impact performance and contribution to the growth of the industry. “Our priority is to set appropriate expectations and define practices in a way that is useful to an investor building or deepening an impact investing portfolio, to support greater participation from both new and experienced impact investors,” said the GIIN’s Sapna Shah.

  • Impact management principles. Next week, global investment firms and development finance institutions are expected to adopt the International Finance Corp.’s “operating principles for impact management,” a set of specific standards for impact investments. The aim: to combat “impact washing” while providing an onramp to impact investing for institutional investors sitting on trillions of dollars in assets. Other industry groups are mobilizing around sets of standards as well.
  • Community voice. “We believe the next challenge for the industry will be incorporating end-user feedback,” said the UK’s Big Society Capital Evita Zanuso. “This will ensure that the social or environmental impact is being felt where it’s most needed.”
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Agents of Impact: Follow the Talent

Clean energy investment opportunities from Asia and sub-Saharan Africa will be showcased at the Private Financing Advisory Network’s Global Investment Forum in Vancouver on May 27… The United Nations Capital Development Fund seeks a digital finance services consultant in Lusaka, Zambia… Smart city venture fund Urban Us is hiring a venture capital fellow in New York.

April 4, 2019.

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