When we first launched in 2013 we knew we wanted to bring education and services to the growing market of investors interested in investing in their own backyard. We knew that these services were hard to find in the marketplace and we knew that nearly century old laws were evolving in real time, but we had not idea how complex the challenge we had set up for ourselves would turn out to be.
Six years later, we’ve learned a thing or two about what’s possible. So much so, that new and existing financial advisors across the country now call us to ask how they too can center services at their firms around this growing consumer demand. Those phone calls forced us to find an easy explanation of what advisors could do, depending on how deep into this movement they wanted to get. As in so many other aspects of this new business world of doing well and doing good, we found a natural metaphor to explain what’s possible.
First, sit back, close your eyes (after your read this sentence), and imagine a lush rainforest. Go ahead… I’ll wait.
Got it in your mind’s eye? Now let’s take a walk through your mental rainforest.
Your rainforest has four primary layers to it: the forest floor, the understory, the canopy, and the emergent layer. Now imagine you have a financial advisor who’s helping you with investing locally and the things they’re doing, the way they move through this forest in service of you can be in any or all these layers. It’s almost as if they’re a flying squirrel, sailing through the trees with an eye on your needs. Now that you can picture the setting, I’ll break down what types of activities you might find your flying squirrel advisor doing in each of these layers.
The Forest Floor
Advisors on the forest floor are flying right beside you as you learn. They’re co-explorers, discovering the twists and turns of the paths, pointing out radiant flowers to you and watching as you stop to inspect a curious insect. You’re learning together, on a journey founded in mutual respect for all that you do not know yet but energized by the shared values that have brought you both to this path together. Advisors in this layer of the rainforest have no direct involvement in any investments you may make – they are mostly curious spectators.
Advisors who are hanging out in the understory, flying through the ferns and bushes, are experimenting with the incorporation of community investments into their existing service offerings. They’re looking for ways to fold it in, without creating new service packages just for this type of activity. These folks are thinking about the things they do well, like asset allocation and research, and how they can leverage those skills and processes for this new type of asset class you’re interested in pursuing. They might be offering you technical analysis of the deals or even collaborating with other peers in the marketplace to find out about new offerings.
These flying squirrels are up in the trees, spreading their wings over the forest of activities and opportunities, weaving a patchwork of support for everything going on below. These advisors are network-builders. They’re advocating for new legislation or public education campaigns. They’re gathering data on trends, reporting to key stakeholders, speaking at large gatherings, and instigating other institutions and financial advisors to pay attention to the market developments as they evolve.
The Emergent Layer
These are the squirrels that get brave enough to poke their heads up above the canopy. This layer of activity is closest to the sun, making it possible for them to get burned but also putting them in a position to capture the most intense energy that the marketplace has to offer. These advisors are infrastructure developers. They’re the ones bringing brand new solutions to the market, taking the biggest risks by being above the canopy and highly visible, but also writing the future for everyone else. If you’re familiar with Malcolm Gladwell’s The Tipping Point, these are the mavens in this rainforest marketplace.
What does this all mean for you
If you’d like your advisor to be helping you with investing locally, take this concept to them and ask them to help you identify where they are in this story. There are good reasons for why advisors may find themselves in some of these layers and not others, but we’ll have to save that for another blog post. In the meantime, ask them to help you understand their thoughts and concerns.
If your advisor is doing some or all these things, then hopefully this gives you a better perspective on how complex the opportunities in this work can be. Currently there are about two to three dozen firms in the U.S. who are already or who are considering helping nonaccredited investors (less than $1 million in net worth) invest locally, so even if you’re frustrated that they aren’t doing more for you recognize that what you are getting is rare in and of itself. Perhaps your particular squirrel friend will begin flying in and through more of these layers for you in the years to come.
And if you’re curious about where Revalue fits in here, I’ll tell you – we do some things in all these layers. Reach out to us if you’d like to learn more about what we do, what we don’t do, and what we’ve tried over the years.
Lastly, while we’re talking about rainforests – let’s save them.