How Robo-Advisors and Impact Investing Will Remake Our World

The investment marketplace, a 36 trillion dollar industry that interacts with a high percentage of wage earners, is undergoing a makeover thanks to FinTech. Today’s investors now have the opportunity to work with robo-advisors instead of (or in conjunction with) traditional financial advisors.

It could be argued that there is a certain irony in the concept of impact investing robo-advisors. After all, robo-advisors (in theory) use technology to supplant the role of the human trader, while impact investing strives to improve human life and humanity at large.

Irony aside, the presence of these robo-advisors is great news for the impact investing market. As the socially conscious sections of society grow larger and louder and the impact investing market grows and moves towards the mainstream, it will need to be able to meet the demands and interests of the larger population. Robo-advisors will be great for this and this partnership (or evolution) could help impact investing grow to a formidable force and make an even greater impact. So why are impact investing and robo-advisors such a perfect pair?

Technology is dramatically changing our world. As technology and our mindsets evolve, companies have to change to meet the new needs of their audience. Modern companies that want to thrive also have to be able to attract the largest and most influential section of the market: millennials. Both socially conscious and technologically savvy, this section of the market wants to invest in positive impact causes and wants an investment system that heavily incorporates technology.

Enter impact investing. Its late launch (2000s) means it’s still a young player in the investment field, and in some ways it seems like it would be a tough sell. If investors are just seeking to maximize their portfolio, it’s a tough sell considering impact investing tends to see smaller margins and returns that rely more on the quantification of social and environmental value. Millennials, however, want their money to make a positive impact, so they are willing to go this route. In fact, 84% of millennials say they are interested in sustainable investing. That’s a big market, if you can reach it.

One of the reasons why robo-advisors work well with impact investing is the fact that they take a smaller percentage than human advisors and this can make the investment seem more profitable. When you add in the increased access that come with the robo-advisors technology (ideal for people not tied to the 9-5 lifestyle), you can see why an impact investing robo-advisor would appeal to the philanthropic millennial.

So how do robo-advisors reach millennials? Simply put, let it be known that you understand their wants and needs and will help them in their quest to make a difference.  OpenInvest, for example, clearly sees what millennials are looking for when they seek out advisors and is marketing itself as the ideal option. By offering services like a dashboard that shows the impacts investors are having in the fields of carbon, gender, military, etc., the company is letting its clients know what is happening with their investments in a way that is much more solid than a number on the stock exchange. Plus, by offering options for the self-employed as well as traditional accounts, OpenInvest is set to play well in the changing work world.

As we move closer to midnight on the doomsday clock the importance of shrinking our eco-footprint grows. This is a notion not lost on millennials. Many are already living an eco-friendly lifestyle but also want to put their money towards the cause, literally investing in the planet’s future.

Although this may seem like an impossibility on the cold streets of Wall (or Bay) Street, times are changing and today’s investors have options.

Meet Earthfolio, a robo-advisor committed to sustainable companies and recognizing the full value of all forms of capital. Millennials choosing to invest using their platform can feel confident their money is going to good use, as the advisor system only invests in companies deemed sustainable or responsible using its environmental, social and corporate governance (ESG) criteria. With easy online access and low annual fees, it’s a fantastic option for those wanting to make a difference with their investments.

Yes, now is the time to actually use your greenbacks for green.

Investing is often seen as cold and heartless, the practice in which the rich get richer by playing stocks. If technology can remake this industry to allow more people to invest in causes that will improve society and the world at large, there is no reason to fear the introduction of robo-advisors. As we enter the era of the millennials, children who were raised with computers and a knowledge of social justice, we are going to see a shift in how the general public relates to money and how the stock market is viewed. They, along with the robo-advisors, will use impact investing to be the change we want to see in the world.