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Financial Planning > Charitable Giving > SRI Impact Investing

Younger Clients Drawn to SRI

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Millennials and Gen Xers are more are more inclined toward socially responsible investing, according to a new report from Spectrem Research, which finds that more than one-quarter of investors under the age of 45 allocate at least 25% of their investable assets in socially responsible companies. Twenty-one percent of female investors do the same. The results were based on a survey of 3,070 investors with assets ranging from $100,000 to $25 million.

Advisors interested in expanding their client base may want to consider these survey results. “Familiarity with socially responsible companies may allow you to develop a relationship with the children of your existing clients,” the report explained.

Not only are more investors expressing more interest in socially responsible investing but the total SRI assets are growing quickly. SRI assets have expanded by 76% over the previous two years to $6.57 trillion at the start of 2014, according to the Forum for Sustainable and Responsible Investment, also known as the US SIF.

Those assets include companies that promote policies such as water conservation and solar energy—which also come under the heading of “impact investing”—and assets that exclude companies that hamper human rights or harm health, such as cigarette producers.

Although SRI is growing, nearly half of affluent investors have no such investments in their portfolio and more than one-third have 1%–24% of their portfolio in SRI, according to Spectrem. Among younger investors, the allocation ranged from 25%–74%, and they are more willing to pay more for [SRI] than other investments.

“Advisors who are aware of [SRI] may have the ability to work with younger investors more easily,” the survey said.


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