Money makes the world go round, so the old adage says, and with the asset management market worth an estimated $110 trillion, that’s plenty of inertia. As we know, the rise of the conscious consumer has increasingly channelled that force into buying products which go some way towards protecting the environment – but there’s only so much that switching to reusable cups, paper straws and energy saving light bulbs can do.
Retail investments comprise around 20% of the market and pensions another 45%. Large institutions are often focused upon as the dynamo of positive change, but with two thirds of the market, that’s a lot of power with the people – see our previous pieces on Active Ownership to explain how you can be a force for good.
Enter…fintech
We’ve all seen the recent shifts to tech-led consumer banks, with Monzo, Revolut and Starling accounting for the majority of current account switches over the last few years. Fortunately, this flurry is paving the way for a shake-up in consumer responsible investing too. As consumers become more comfortable with these new faces in a traditional oligopoly, it makes sense that trust will be easier to garner for fintechs entering the personal investment space too.
That’s great, but how do I get involved?
We’ve scoured the market and found a few promising, planet-friendly contenders to keep your eye on! (Please note, this overview does not constitute as investment advice and your initial investment could be at risk).
An impact-focussed digital wealth platform that takes your pulse as to which causes are important to you. Crucially, the platform doesn’t just educate, it facilitates too – enabling you to invest directly upon it. With multiple linkages to large asset managers’ products to buy, instead of investing in one or two companies, the risk of your investment is spread across a multitude of holdings, grouped together in a fund. (so if one stock performs badly, the others are there to help balance it out).
Unlike tickr, clim8 goes straight to the source and invests directly in companies and sectors that are making a positive difference on climate change (that is, doesn’t invest your money in others’ products, as tickr does). Their own investment team sifts out the true impact-makers, challenging some common value-investing cornerstones such as Big Tech for not actively contributing to a greener future with the products and services they offer(which may still be included in more generic ‘responsible’ funds).
This platform doesn’t provide investment products itself, but pulls upon huge datasets to help both financial advisers and consumers by identifying both investments and brands to buy from which align to causes they care about. They can also help you see how your current investments stack up too!
What else do I need to know?
Whilst these new entrants may be pushing for a change agenda within a traditionally glacially moving industry, it’s important to remember that assessing their own environmental and social practises will be left to you.
Look for platforms which are licensed and regulated (normally listed at the bottom of their homepage) and those who are signatories to the United Nations Principles for Responsible Investing.
The challenger banks themselves are now staving off even these newer entrants by increasing the investable universe on their own platforms –Troidos’s offering is particularly comprehensive within the responsible investing space.
Be curious!
Dip into the technology section of PWC’s industry report on page 17 for more around the current tech disruptions in this laggard industry
Fintech Futures keeps abreast of the newcomers so you don’t have to!
Disclaimer
Our publications do not offer investment advice and nothing in them should be construed as investment advice. Our publications provide information and education for investors who can make their investment decisions without advice.
The information contained in our publications is not, and should not be read as, an offer or recommendation to buy or sell or a solicitation of an offer or recommendation to buy or sell any securities. Our publications are not, and should not be seen as, a recommendation to use any particular investment strategy.
