Advisors need deeper client relationships to remain relevant

 In Advisors, Impact Investing, Investments

There is no doubt that there is a lot of investment money around! However, decisions around its application are becoming increasingly programmatic and advisors need to deepen their relationships with their clients in order to stay relevant.

The bigger funds are attracting billion-dollar investments from pension and institutions, but “asset allocators” (yes such a job actually exists) have very few tools at hand to predict valid risk / return metrics. Diversification is the logical one, but it’s mostly a risk management mechanism to balance the unknown:  Leverage is another and deciding on an active or passive manager is the third.

What doesn’t often get spoken about is that these mega brand funds are not the best managers of this money because they simply can’t focus on each and every investment opportunity.  It takes passionate, niche operators to consistently deliver absolute return and double digit dividends.  However, if these niche skills are not identified and financially backed, these funds remain under-funded.

More importantly, the businesses that these funds invest in, and actively grow, won’t emerge to create positive impact and much needed evolution. The dominant and dated economic model remains in stasis or at worst, stumbles along often perpetuating environmental and social damage.

Alternative investments and impact investing are increasingly emerging as topics that advisors are asked to incorporate into their clients’ portfolios, to drive meaningful returns across all measures.

According to the 2018 UBS Investor Watch Survey, US adoption of sustainable investing is expected to increase by 58% in the next five years, driven mainly by millennials and women.

These are not “difficult” segments, but rather consumers and decision makers who want to see positive change, in current and in future generations’ behaviors.

In fact, according to the UBS report which surveyed 5,300 high-net-worth individuals from 10 countries with at least $1M in investable assets, 65% of investors want to create a better planet with their money.

These investors may have been doing well in public equities, cash and bond markets, particularly over the last 12 months with FAANG stocks carrying the S&P500, but there is now a growing view that a recession is inevitable and the only question is when it will happen.  This reality is driving a review of investment portfolios.

This review, along with increased investor sophistication and access to information, means that investors are now demanding access to alternative investments – the kind of deals that VC and private equity players have been making millions of dollars from for years.

The UBS survey unfortunately also found that 70% of investors find the language around impact and sustainable investing to be perplexing, confusing and even sometimes plain misleading.

The time has come for trusted advisors to deepen their relationships with clients (and attract new and younger clients) by clearly and simply explaining the terms and concepts of impact investing and to help clients to successfully align meaningful purpose with ethical, but market-related financial returns.

At Scarab Funds, we believe in promoting a Future Fit® society, one where the smart money is used to add financial value alongside environmental and social value.  Whether you are an advisor wanting to learn more about our high-yield alternative portfolio or an accredited investor / family office wanting direct investment into responsible investments, if you share our vision of the future, get in touch with us now.

You may also be interested in attending training programs we are running for advisors to explain impact investment returns!

Contact Scarab Funds at or call on +1 (215) 452-8176 to have an honest conversation about positive growth.

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