ThomasKostigen

SANTA MONICA, Calif. (MarketWatch) — Good for you, Morgan Stanley Smith Barney! You are paving the way for Wall Street to get into the impact investing space.

By launching your Investing with Impact Platform, you can change the world — literally.

By targeting risk-adjusted financial returns as well as positive environmental and social impact, you are telling investors they can do well and do good at the same time. The idea, I know, is to help clients align their financial goals and their personal values, and by empowering your financial advisers with a broad range of investment options you are taking the lead on a whole new investment class.

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As you readily admit, the concept of integrating social and environmental impact into investment decisions is not new, but its growing importance has led to greater opportunities for investors; nearly one in eight dollars under professional management in the U.S. — or about $3.07 trillion — follows investment strategies that consider corporate responsibility and societal concerns.

Indeed, a focused effort to meet investors’ desire for investment opportunities that center on positive social and environmental impact without sacrificing financial performance potential has been a program in waiting. It’s high-time an institution such as yours has stepped up to fill this void.

As your head of investment strategy and client solutions, Paul Hatch, says, “With over 4 million clients who have more than $1.7 trillion of investable assets, we are in a unique position to extend the reach of an ‘investing with impact’ program to one of the largest sets of investors in the world. Even a fraction of this total represents a substantial amount that could be invested in support of the common good.”

And as we all know, now that you have announced your effort, other broker dealers will be following suit. If there is one thing we can count on from Wall Street, it’s copycatting.

In fact, it’s already begun. After your announcement April 26th, my inbox was chock full of emails from your competitors who had read the release and wanted to know more. The head of a major Wall Street trade association even called me to see how he could leverage your announcement to get his other members engaged in the impact investing space. His other members include the biggest Wall Street brokerages, as well as asset management firms from around the world.

For the average investor, Morgan Stanley Smith Barney, you will be providing a valuable service. And we the public at large can certainly expect a host of products and services that invest in myriad securities and vehicles domestically as well as abroad. These, I am sure, will include domestic, global, and international bond offerings; equities of all sorts; and even exchange traded funds.

As it stands the impact investing space is mostly a private-equity strategy for wealthy individuals, family offices, and institutions. By holding out a unified managed account, whereby a mix of investments can all be managed under the same roof, as you have, the masses can be motivated to create their own investing philosophy that jibes with their personal values, and not — as has been historically been the case with socially responsible mutual funds — leave that mission up to another’s decision-making.

This is empowering. This opens the door for average individual to participate in markets and investment opportunities that have been to date reserved for the investment elite.

Thanks, Morgan Stanley Smith Barney, for letting us in.