Social investment’s place in the financial services community has been bolstered this week, with the Financial Services Authority calling it a “new market development” in a newsletter.

Many have taken to Twitter to celebrate the Financial Services Authority’s (FSA) comments, which include acknowledgments that investors may have investment objectives which provide social returns rather than purely financial. 

Luke Fletcher, a senior associate at law firm Bates Wells and Braithwaite, welcomed the news, saying he believed it was the first time that the FSA has expressly said in such clear terms that investors may have objectives which trump purely financial objectives.

“It shows that the regulatory perspective on social investment is moving,” he said, “building on the social investment reforms to the Financial Services Act 2012, which acknowledge that investors may have 'different expectations' for different transactions.”

During the Financial Services Act’s passage through Parliament the FSA agreed to make clear that its existing rules do not restrict advised sales of social investment products.

The move will be a welcome boost to the social investment market, which is currently still relatively unknown within the wealth advisory community.

Kate Brookes, an independent financial adviser, said: “I had an enquiry about social investing last year, and felt I couldn't get involved in any advice regarding this field, as I did not know enough about it, or even if I was allowed to become involved in this type of investment. This year I would presumably have to consider it, or find an expert in the field to refer to in order to demonstrate independence.”

Next week will see the launch of the Social Investment Academy, which has been set up to promote social investment to the wealth advisory community.

The Academy is the brainchild of Gavin Francis of Worthstone and David Ingram of Aim Two Three.

Gavin Francis, founder of Worthstone commented: “Social investing is a fast growing phenomenon. The Social Investment Academy has been established due to demand from thought leaders amongst wealth advisers with an objective to inform and equip advisers to be able to offer social investment to their clients with knowledge and authority."

 

Want access to all civilsociety.co.uk content? Subscribers gain access to all expert advice, analysis, surveys, special reports and the full archive of content from as little as £43.20 per year. Find out more...