Editor’s note: This article is part of a continuing series in which Paul Ellis, a well-known advisor and consultant on sustainable investing strategies, interviews industry professionals on the topics of millennials and sustainable investing. What follows is an interview with industry expert Lori Choi, wealth manager and partner at Veris Wealth Partners, a pioneering wealth management firm and recognized leader in sustainable and impact investing.

To read the first article in the series, click here: /news/the-wise-woman-and-the-millennial-23738.html

To read the second article in the series, click here: /news/millennials-leading-the-way-in-sustainable-investing-24019.html

To read the third article in the series, click here: /news/millennials-mainstreaming-impact-investing-24487.html

To read the fourth article in the series, click here: /news/an-sri-collaboration-across-generations-and-genders-24873.html

To read the fifth article in the series, click here: /news/like-minded-people-with-purpose-and-passion-25457.html

To read the sixth article in the series, click here: /news/green-investing--all-in-the-family-26082.html

To read the seventh article in the series, click here: /news/sri-investing-well-positioned-for-growth-26394.html

 

Paul: Lori, let’s begin with your background prior to Veris Wealth Partners. Tell me what brought you to this point in your career.

Lori: I went to undergrad at the University of Pennsylvania’s Wharton School. I joined the financial world when I moved back home to Hawaii, working for the private client asset management group of the Bank of Hawaii. Later, I moved to the East Coast and heard about Veris from a colleague at the Bank of Hawaii.

It was an opportunity to connect my wealth management experience with a personal passion for healthy living and sustainability issues.

Paul: Tell us what you are focusing on with clients and what your partner responsibilities are within the firm.

Lori: I work with Michael Lent, our chief investment officer, to support 30-40 of our largest clients here in the New York office, focusing exclusively on impact investing solutions. I also have my own clients.

Being involved in strategic partner conversations has been very interesting. I’m also taking on managerial responsibilities and have an associate who reports to me.

Paul: I know you are focusing on Veris’ work in the gender lens portfolio development and asset management. How do you identify firms for investment?

Lori: Some of the things we consider are whether the strategy supports women entrepreneurs gaining access to capital, promotes women in leadership and creates products for women and girls. Often there is not a specific product that covers all facets of the client’s goal. We incorporate multiple strategies and products that, as much as possible, achieve the goal.

The client’s individual priorities may bias or change the way we structure the portfolio. For example, some clients want to have more impact with women and girls at the bottom of the economic pyramid vs. support for women in corporate leadership roles in the U.S.

Paul: How is access to private and public market capital for gender lens portfolios developing?

 Lori: There are more investment products in the private and public markets. Since 2013, the number of product offerings has nearly doubled, so many products mentioned in our recent Gender Lens 2.0 whitepaper didn’t exist five years ago.

Paul: You have wealthy family, family office and private foundation clients with multiple generation stakeholders. Tell us about these clients.

Lori: Yes, we work with a range of clients where we see multi-generational conversations happening. We have very innovative fifty, sixty year-old clients who are giving us new ideas and modeling good stewardship of family assets for their children, as well as millennials who are encouraging their families to do more impact investing. We have several young clients, for example, who have led their families in allocating a portion of their family's wealth towards impact strategies and creating their investment policy statement (IPS).

Paul: You mentioned the family’s IPS.

Lori: It’s an investment policy statement, which is a good thing for any investor to have. It outlines the investment parameters, allocations and acceptable risk and return goals. We include an impact priorities section, which talks about the guidelines for impact investing. For example, if climate change is a priority, what are the opportunities and does the client want to include both inclusionary as well as exclusionary guidelines.

Paul: I have heard from other millennial professionals in the industry that as a generation you focus on sustainability as consumers and investors. 

Lori: Millennial clients are coming to us more informed and having done more research than older generations, and they have an impact investing vocabulary that older generations don’t have. Some have studied social entrepreneurship and impact investing in undergrad or grad school. They also participate in online and in-person peer networks. They have a higher level of expectation about what they want and what they envision as possible. As retail investors, they are interested in doing more of the research work and use crowdsourcing for that activity.

Paul: Young professionals in our industry are creating online platforms to work with millennial investors. What can a firm like Veris learn from these platforms?

Lori: The online platforms are providing a lot of information to millennial investors who want to do the research themselves and understand the mechanics behind financial products, as well as the fee structures. The traditional financial advisory world can learn from this by doing more education up front with clients.

Today, there are algorithms that suggest strategies, but this is not a professional advisor, so perhaps this can work for people who have very basic needs as investors. These platforms don’t have comprehensive impact investing solutions yet, and you can’t have a conversation with someone who can customize that solution for a particular person’s interests and passions. We do a lot of listening in order to understand clients and make sure their portfolio is reflecting who they are.

Paul: How does Veris approach shareholder engagement?

Lori: Veris is a manager of managers and we often choose those managers because they have expertise in shareholder engagement, so we know we are getting the right type of proxy voting and resolution filing. The managers report on this quarterly and we report back to the client. The managers contact us when they are filing a resolution and want our clients’ shares to be part of the process.

Paul: Do you have clients who want to be active in shareholder engagements with corporations?

Lori: The majority of clients prefer to outsource that work to experts, but some clients want to be involved. I have a client who was holding shares of a company that she inherited for the precise reason of shareholder engagement. The process becomes more personal when someone has held the stock across generations, what we call legacy positions.

Paul: Do you think we are going to see the development of ESG materiality standards in the next five years that investors can use as guidelines?

Lori: I think that the development of ESG materiality and impact standards will be really important for our industry. SASB’s (Sustainable Accounting Standards Board) work to establish reporting guidelines of material ESG risks will help standardize the acceptance of these issues over time. For public equities, I think we will start to see more ratings of portfolios, comparing the carbon footprint of your portfolio to a benchmark, for example. From an overall portfolio perspective, including fixed-income and alternatives, impact-reporting standards will take some time because the infrastructure isn’t built yet.

Paul: As a partner in a firm like Veris, you’re putting your expertise to use in multiple ways. How can other young people interested in a career in our industry develop the kind of focus you have?

Lori: Talking to people already in this field has been one of the best ways for me to learn and connect. Also, join networks like WISE (Women Investing for a Sustainable Economy) that can introduce you to those people. If you want to work on the asset management side, you still need to get a CFA or an MBA, but you will be that much stronger as an analyst if you have a passion for sustainability as well as the financial background. I feel like there is so much more to come in this industry, this is just the beginning!

Paul Ellis founded Paul Ellis Consulting to work with financial advisors who want to integrate sustainable and impact investment strategies for their clients. Lori Choi is wealth manager and partner at Veris Wealth Partners.