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 experts, Marlo Stil, managing partner and wealth advisor at The Wealth Consulting Group; Kathleen McQuiggan, senior vice president at Pax World Management; and Kelly Coyne, vice president of advisor sales at Pax Ellevate.

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

 

Paul: Kathleen and Kelly, how did you become colleagues at the Pax Ellevate Global Women’s Index Fund?

Kathleen: Kelly and I were introduced four years ago. She was working in sales at Eaton Vance at the time, and I just loved her interest, enthusiasm and spirit for our business, so we kept in touch.

In June 2014 when Pax World launched our partnership with Sallie Krawcheck and Ellevate Asset Management, we created a new role that I thought would be perfect for Kelly.

Kelly: I had just been promoted at F-Squared, but I jumped at the chance to work with Kathleen because who I work for is very important to me. 

Paul: Marlo, how were you introduced to Ellevate?

Marlo: Ellevate caught my attention, and I knew it would be interesting to our women clients. For years, I had shied away from socially responsible funds because of the traditional advisor perspective that narrowing selection criteria would negatively impact investment performance.

But research showing the positive impact of having women on boards of directors and in senior management is very compelling. And I knew our women clients would be interested in focus groups, one of the ways suggested for approaching clients on this topic. I contacted Kelly to ask how Pax could support us, and that was the beginning.

Paul: Kelly, how many calls like that do you get a week?

Kelly: Not too many like Marlo, who was willing to jump in headfirst. Everything started to move very quickly after that initial conversation. I think Marlo was on a golf course disrupting other golfers as we were chatting!

Marlo: One of those women on the golf course actually came to the focus group. I was so excited that people on the course were hushing me.

Kelly: I went to Marlo’s focus group in Palm Desert, where she lives and has her office. That was in April 2015. Six months later, Marlo’s practice had gone from 0 to 60 in terms of integrating environmental, social and governance (ESG) investments and launching their impact portfolios.

Paul: Kathleen, were you anticipating this kind of response from a very successful advisor like Marlo?

Kathleen: We’re always hopeful for this type of response, but weren’t sure how the marketplace would accept a product like Pax Ellevate. Marlo is a good example of a veteran advisor who’s successful and still open to new ideas that clients will find helpful to their financial goals.

Paul: Marlo, you and I met last May when your practice and firm were in transition and you were planning to launch client portfolios focused on ESG investment strategies. What was your expectation of other advisors in the firm embracing these strategies?

Marlo: We had transitioned to LPL Financial as our broker-dealer and joined The Wealth Consulting Group (WCG). I’m very fortunate to work with Jimmy Lee, our forward thinking CEO, who said “Marlo, I think you’ve probably hit on one of the most important opportunities our firm will ever see.” He gave us the green light. And having a team of 34 advisors made building something new more exciting.

ESG integration was one of the catalysts for asking our clients to transition to an independent broker-dealer with minimum disruption. I knew if it worked for my practice, it would work for the other advisors. That helped create a lot of enthusiasm at the firm level, which keeps you energized.

Paul: Kelly, as a millennial, what have you learned from Kathleen that’s helping you build relationships with advisors like Marlo?

Kelly: We have such a cool working relationship, and I’m constantly learning from her. She built a successful career at Goldman Sachs working with advisors and has a great reputation in the industry. Relationship building is the most important mentoring Kathleen offers me.

Paul: Kathleen, what’s your experience working with millennials?

Kathleen: The firms I’ve worked with have always valued the different perspectives younger people bring. At Goldman Sachs, we brought young people in to work with us as interns and analysts.

What’s been different about Pax Ellevate is the relationships we build with advisors like Marlo. I’m thrilled with how Kelly has no hesitation about working on things she hasn’t tried before. We mold our perspectives together through good communication. When we add a dynamic advisor like Marlo, it creates a group of like-minded people with purpose and passion working for our investor clients. 

Paul: Marlo, what are you seeing within the advisor group at WCG related to sustainable investing?

Marlo: We have a couple of younger advisors who understand how the opportunity will make their careers. This approach to investing resonates with their clients and will launch the growth of their practices.

We have others who are more traditional and are taking their time to learn about sustainable investing. I’ve launched new products before, and I know it takes time and consistent performance, whether it’s with clients or advisors. Even so, 40 percent of WCG advisors are learning how to integrate ESG into their businesses.

I think the next phase of growth for the industry will be through advisors who work with and understand the millennial investor mindset. Those who do will keep growing their businesses during the next great money migration.

Paul: Kelly, you work for a firm and on a team that focuses on the excellence of women in business as an opportunity for investors. What’s this like for you as a woman early in your career?

Kelly: It’s exciting to be part of something so unique. It’s not typical in this business to be passionate about mutual funds, but the one Pax World and Ellevate have launched is different. It speaks to me as a woman of my generation, which is driven by personal values. I think funds like this one will increase in popularity because there’s a strong business case for investing in firms with more women in management positions.

Paul: Kathleen, based on your career at Goldman Sachs and now Pax World, what developments do you see five years down the road for sustainable and impact investing?

Kathleen: We see more investors looking holistically at their lives and wanting their financial planning to match that point of view. They want to know what levers can make that happen. 

Historically people have separated investing and philanthropy. Today more people want sustainable alignment across these parts of their lives. There’s no reason why they can’t be integrated. And we’re finding that forward-thinking advisors like Marlo want to discuss these things with their clients.

Kelly has also been great in helping us to see that millennials want to buy brands that align with their values. 

Paul: Kelly, what can you say to young people interested in a career in financial services? Or those in business school?

Kelly: The sustainable and impact investing industry is exciting and cutting edge. We're working with forward-thinking companies, and I believe this is the future of investing. I think it’s very important to find mentors like Kathleen and Marlo who will advocate for you as you grow in your career.

Marlo: There’s a science to managing money and that part of our business is more of a commodity all the time. At the organic level this business is not technical, it’s built on relationships, and that’s one of the reasons women make such good financial advisors.

In 30+ years as an advisor, I don't think I've had a more personally valuable relationship with a product partner than the one I've built with Kelly and Kathleen. They’re a great resource to any advisor interested in sustainable and impact investing.