I set up Ethex because I want positive investment to be easy to understand and easy to do. I have spent many years on both sides of the investment relationship. Sixteen years ago I set up and ran the Ethical Property Company, which has raised more than £20 million in patient capital. And I’m an active investor too. While most people only start thinking about investing more positively in their 40s, once they hopefully find themselves more financially secure, the unexpected death of my father in my 20s left me struggling to bring my beliefs and my inheritance in line.
Shouldn’t positive investing just be part of normal life, something that everybody does as a matter of course?
This early start gave me many years to think. Shouldn’t positive investing just be part of normal life, something that everybody does as a matter of course? I realised that this could only happen if some major structural problems in the positive investing marketplace could be overcome.
First, there is financial literacy. To invest directly in a business you need to be confident in what you are doing and to understand the risks. But there are almost no educational resources around to help with this. The result is that we remain unsure of whether we are doing the right thing when acting on our own.
Second, there is regulation. Obviously, investors need to be protected from scams and misinformation. But a balance needs to be struck between protecting people and allowing them to make their own decisions. Otherwise regulation creates disempowerment, by building an unintelligible wall between the business and the investor and forcing them to rely more heavily on financial professionals who in all honesty usually don’t understand positive investment very well.
Finally, there is a need to provide a top quality service. This is much more than being customer-led and responsive and having a website that’s easy to use. It’s also about aftercare once an investment is made – how easy is it to track my investment and what it is worth, and to sell it when I need to?
Solutions to these problems are complex and expensive, but this is the challenge that Ethex has taken on and where I have chosen to bring my many years of experience to bear. It’s a timely struggle.
I sense that at last we are seeing a popular response to the 2008 financial crisis and the loss of trust in financial institutions it engendered. Positive investment is new and immediate. It stands in stark contrast to the green and ethical retail funds market that have been the mainstay of ethical investing since the early 90s. The truth is that most of these funds have not kept pace with the market. They tend to be about the avoidance of harm rather than the doing of good, and they don’t meet modern day transparency standards. It’s hard to know how they decide what to invest in and what charges they levy on investors.
It is my belief that a popular movement is emerging. People are tired of the old and failing financial system and are calling for change and are taking matters into their own hands. We live in a democracy, in which the authorities must listen to what the people want and respond. But like any movement it needs to be well organised to be effective. Ethex is playing its role in that. So why not join us?
Jamie Hartzell is a long term social entrepreneur. His latest venture is Ethex, a not-for-profit investment platform making it easy for individuals to make positive investments, and now acts as chair. He is also chair of leading social enterprises Divine Chocolate and Zaytoun. He founded The Ethical Property Company in 1998 and grew it to be one of the UK’s leading social businesses providing affordable workspace to charities and social enterprises, and set up sister companies in France and Belgium. Previously he was a documentary film-maker working on environment and development issues with the BBC and Channel 4 leading to extensive travel across Africa, Asia and Latin America.
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