A number of investment management houses have joined forces to work with street newspaper The Big Issue to launch a mobile-first investment platform designed to bring social and environment impact funds directly to a retail audience.
‘The Big Exchange’ venture is being led by Aberdeen Standard Investments, joined by Columbia Threadneedle, Alliance Bernstein and Alquity as founders, who will also offer their impact funds on the platform.
It has already received offers of support from major institutions for at least £1m in funding and phase one will begin with ‘The Impact Platform’ (called The Big Funds) which will make financial services available to the public through a mobile-first interface.
The overall objective is a complete blockchain-based ecosystem that works for everyone.
ASI’s global head of distribution Campbell 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. That is why we are launching The Big Exchange.
“We can take up to twelve firms as founders, who will have exclusive rights in the first year to market their impact funds and help shape The Big Exchange. We are close to closing our initial round, thanks to an overwhelming level of interest and support from the investment industry.”
Michelle Scrimgeour, CEO EMEA, Columbia Threadneedle Investments, added: “Columbia Threadneedle has been a pioneer in socially responsible investment and we are excited to be part of the Big Exchange, an initiative that will enable all investors to do well by doing good, through easy access to a choice of ethical and social impact funds.”
Nigel Kershaw, chairman of The Big Exchange and The Big Issue Group, said the venture follows the same principles as the magazine which offers employment opportunities to people in poverty.
“It follows the same priniciples of its co-founder Lord John Bird of a hand up, not a hand out,” he said. “A mission-driven business that is more effective and sustainable because it is not a charity. It will help millions of people to help each other build a better society. That is huge.”
Tech Platform builder FNZ, led by Phil Goffin and specialist marketing agency AML Group, led by Ian Henderson are also involved in the venture while former head of UK strategy at HSBC, Emma Bickerstaffe, has joined to lead the launch team.
Other participants include consulting firm Fimatix, Trowers & Hamlin, Herbert Smith Freehills, 3D Investing and FNZ’s regulated affiliate Rexigon Securities, which will provide execution and custody. The team has developed the platform to user testing stage with a beta version to be launched early in 2019.
The funds will be offered at a price which the group says will be among the lowest in the market and the platform will allow investors to select their preferred area of impact (matched to the UN’s Sustainable Development Goals) and risk appetite “at a click”.
Bickerstaffe added: “The aim is to offer 30-40 quality impact funds via the platform from day one. Over the first five years we believe The Big Exchange will become the go-to platform for retail impact investors and attract around £3bn of assets.”
Kershaw continued: “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.”
Users will then be able to choose from ready-made bundles or individual funds, and track not only performance but impact through the app. The platform will also offer educational and supportive branded content from the fund managers involved. The impact that each user creates will be recognised and rewarded through a unique digital social passport and token system.
The fund managers will be featured in a ‘movement-based’ marketing programme using advanced consumer targeting (with Experian) via social and digital channels, together with profile-raising PR and advertising activity, coordinated by AML Group.
After initial platform testing, it is expected that a rolling launch programme to the public will start in early 2019 for The Big Funds. It will then be further enhanced with additional functionality and financial products over the course of the year.
Leading industry executives from the firms involved will be members of The Big Exchange’s executive and investment committees.
This article was first published on our sister title Investment Week.