Big Exchange platform promises impact investment that 'works for everyone'
Individuals could soon become social investors with as little as £2.50 at a time.
London-based Big Issue Invest, the social investment arm of The Big Issue magazine, announced this week a new mobile-first investment platform that will bring a range of social and environmental impact funds direct to a retail audience for the first time.
The investment platform is the first phase of a wider initiative, The Big Exchange, that aims to make ethical financial services and products, including a cash account, available to all through a simple mobile-first interface. The overall objective is a complete blockchain-based ecosystem that "works for everyone".
The minimum investment amount on the platform will be £500, but Nigel Kershaw OBE, chairman of The Big Exchange and The Big Issue Group, hopes to bring that down to just £2.50 in future, the Financial Times reported earlier this week.
A beta version of the platform will be launched in early 2019, with additional functionality and financial products added during the year.
Some 30 to 40 impact funds are expected to be on offer from day one. Investors will be able to select their preferred area of impact (matched to the UN’s Sustainable Development Goals) and risk appetite at a click, and will be able to choose from ready-made bundles or individual funds.
They will then be able to track impact, along with financial performance, through the app. The impact that each user creates will be recognised and rewarded through a "unique digital social passport and token system".
The platform will also offer educational content from the fund managers. Funds will be offered at "a price which will be among the lowest in the market".
Kershaw said: "Central to The Big Exchange is that investors can understand the positive difference made by their choices. Our unique approach will show investors through clear indicators how funds support the Sustainable Development Goals and align with our commitment to people and the planet."
The Big Exchange has received indications of support from major institutions for at least £1m in funding and, according to Aberdeen Standard Investments' (ASI) global head of distribution Campbell Fleming, "an overwhelming level of interest and support from the investment industry". As well as ASI – the UK’s largest asset manager – Columbia Threadneedle Investments, Alliance Bernstein and Alquity will join as founders and offer their impact funds on the platform. Executives from the firms involved will be members of The Big Exchange’s executive and investment committees.
The Big Exchange expects to attract around £3bn of assets within five years.
Paul Robinson, chairman and founder of Alquity, said: "How we choose to spend our money is more powerful than we think… The Big Exchange empowers those who crave a better and fairer future by allowing them direct and affordable access to great responsible investment opportunities."
Fleming said: "Change in the way the UK invests is long overdue. Low cost, well-managed impact funds can help people do better with their savings, while doing good for society and the planet without sacrificing financial returns."
Big Issue Invest has invested in over 330 organisations since it was launched in 2005. It currently manages or advises on £192 million of social funds.
Disclosure: Pioneers Post’s founder and director is a board member at Big Issue Invest.
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