We recently caught up with Geri Eisenman Pell, president of Pell Wealth Advisors, a private wealth advisory practice in Rye Brook, N.Y., of Ameriprise Financial Services. Pell, who has been named one of the Top 100 Women Financial Advisors in the country by Barron's for the last five years. We asked Geri a series of questions regarding her belief in socially responsible investments and in incorporating impact Investing into her practice and investment strategies. Here is what she shared with us.
Q: When did you first become interested in socially Responsible Investing (SRI) or Impact Investing as an investment platform?
I have always been socially conscious in my own personal values and perspectives, which has undoubtedly played a role in my interest in impact investing. Clients however, have also played a large role in making me dig deeper into impact investing over the years. I had one client early in my career, a college professor, who told me that he had an option inside his tax-sheltered annuity to invest in an SRI fund that would exclude investments tied to anything that supported apartheid in South Africa. This really resonated with me from my values perspective and I found myself wanting to know more.
On another occasion, I met a client (about 14 years ago), who found me on the Web site for Calvert funds. She came to me and told me she wanted to make her portfolio exclusively SRI. Though I had some experience with it at the time, there was a great deal of information I still needed to learn. She purchased me a book called, Investing with your Values by Brill, Brill and Feigenbaum. It’s a book I still keep on my shelf for reference to this day.
At first, I only really understood impact investing to mean the exclusion of investments in certain areas, but there is so much more to the SRI conversation. I learned this at a presentation I facilitated for my clients by Calvert. They spoke about governance issues and the ability of investors to influence boards and companies to adhere to certain ethical standards. I had little to no idea that shareholders could wield that kind of power, piquing my interest in impact investing even further.
Q: Impact investing is something that can be seen from a community perspective as well. How have you engaged yourself socially within the community in areas other than investments?
Personally, I choose to engage and invest myself within the community by getting involved with various philanthropic organizations. One of the areas within socially responsible investing that has always taken priority in my life is the corporate governance policies within the organizations with regard to their treatment of women. While I have been able to invest in companies that treat women equally, I have also had the opportunity to work with organizations that have set out to prioritize women across the globe. For example, I am on the Board of World Pulse, a digital media organization that helps to lift and unite women’s voices to accelerate their impact on the world. Using their Web-based platform, World Pulse helps grassroots women to speak out, connect and create solutions from the frontlines of today’s most pressing issues. World Pulse plays an enormous role in protecting women all around the world and has had an impact on things such as women’s equality, unfair wages, slave labor, discrimination and generally poor work practices where women are concerned every day. I am also involved with Girls Inc., an organization that inspires all girls to be "strong, smart, and bold" through life-changing programs and experiences that help girls navigate gender, economic and social barriers.
Another area of philanthropy I have worked closely with is community hunger. As a practice, we donate funds in honor of client’s birthdays to the Food Bank for Westchester, an organization that helps distribute food to over 225 front-line hunger-relief programs throughout the county, including food pantries, soup kitchens, shelters, and adult, child-care and treatment centers. The Food Bank provides over 95 percent of all the food these front-line programs distribute to feed some or all of the estimated 200,000 Westchester children, seniors and their families who are hungry or at risk of hunger, totaling about 14 tons of food a day and nearly 7.5 million pounds of food a year.
Where sustainability is concerned, I have had the opportunity to be involved with Scenic Hudson, an organization that works to protect and restore the Hudson River and its majestic landscape as an irreplaceable national treasure and a vital resource for residents and visitors. These organizations have all been at the core of what moves me personally. I believe everyone has to find their niche and what matters to them most and run with it.
Q: You mentioned before that you got excited about the ability of individual shareholders, even those with small accounts of assets invested, to influence corporate governance and behavior through collective groups of shareholder activists. How are you observing clients responding to those types of opportunities today, as opposed to when you started 15 years ago?
When I first began evolving as an advisor and decided to be more conscious of impact investing, it was not a huge draw for many clients. Many of them would say things along the lines of “I’m interested, but not at the sacrifice of return.” The industry was smaller then and there were not as many investment opportunities or even compelling evidence of investment return.
In more recent years, however things have begun to change dramatically. For example, there is usually a negative connotation attached to the word “lobby” these days that has turned people off to many special interest groups. When clients hear they can be advocates for good, and that as socially responsible investors their interests are represented in governance and corporate and governmental change, it becomes very appealing.
To me, one of the easiest things to talk about with clients and advisors alike is global water and the need for cleaner, more easily accessible water. We have an aging infrastructure in developed countries and water shortages across the globe. Water has become a $500 billion industry, is projected to grow, and is full of opportunities.
By the same token, women and men alike have expressed concern about gender equality in the workplace. White papers have been written on studies that concluded that when there are two (three) or more women on the Board of Directors for a company, their overall performance level is better based on several measures of corporate performance. Recently, many of my female clients have been saying, “If we are going to change the world and have an impact, one way is to be engaged as a shareholder and vote with my pocketbook. That’s the most effective way we can get companies engaged with women and have our voices be heard.” Clients respond because it’s good for the world. It’s not just good for women; it’s good for the companies, it’s good for our daughters, and it’s good for the future. The Global Women’s equality Fund from PAX World is an example of a fund on the forefront of this investment concept.
Q: What about product and marketing support for the SRI asset managers in the industry that you are working with? How are you finding those relationships to be developing? In addition to the product companies, do you find a level of support in Ameriprise, for example, as a company for the types of initiatives you are focusing on?
Ameriprise has been wonderful to work with when it comes to impact investing. I recently updated my Web site to reflect our concerns and interest in sustainability, environmental, social and governance issues. It was easy to work with compliance. I really believe they will support and follow me through to the forefront on this.
Most of the support I get is from a consultant I hired who used to be an advisor. He specializes in the SRI arena and has managed to make a lot of introductions and provide me with a great deal of information to broaden my, and my staff’s depth of knowledge.
Equally important, has been the relationships developed with all the fund families. For example, Calvert has done wonderful presentations, and have proven very supportive and have made themselves available to speak with and answer any and all questions that come up daily. This was also the first year I attended the US SIF conference, which put me in contact with many different companies and their SRI product offerings. This kind of networking has allowed me to learn as I work with clients each day.
Q: There’s an extensive network of financial services professionals that works in impact investing and many of them have many years of experience. Are you able to find kinship with these folks when you go to meetings and conferences?
Absolutely. There is definitely a kinship and a caring there. As advisors, we share the way we run our practices, looking for opportunities to do the right thing, which adds a whole layer of satisfaction to an already incredibly rewarding field. Because the industry has grown so much, I can call any portfolio manager or investment analyst and ask, “What do I need to know about this fund? Why would I be interested in investing in this?” and they are always open to sharing information as they are building this industry and want to keep people informed.
Q: You have a whole team of people who work with you as financial advisors within your practice. How have you implemented SRI investments into your own practice?
It’s interesting, because every advisor is different and has different ideas to bring to the table. We have an investment system where we make decisions together to agree on the direction we want our practice to go and create a list of investment strategies based on the ideas and values we share. Just because a fund is socially responsible, for example, does not mean it automatically makes the list. Just as any other investment, socially responsible funds are screened to match the specific criteria we use to decide if we should introduce it to clients’ investment portfolios.
I have been working hard to educate the advisors in my practice to make sure everyone is knowledgeable and on board. I think that cold, hard facts and seeing things from a financial point of view can also help some advisors understand the value of investing in SRI.
Q: What is your advice to advisors who are seeing client demand for SRI and are thinking about becoming involved?
This is a growing industry with new information and opportunity on an ongoing basis. I think it’s important to communicate with other advisors and with fund companies that manage socially responsible funds. Start by reading white papers that many of these fund companies have, along with different blogs and editorials. Listen to wholesaler calls. There is a great deal of material out there, so immerse yourself in it and become informed. Hire a consultant, as I have, to teach you and your team the benefits of impact investing, how to work it into your practice, and how to set goals to make it as much of a priority investment platform as you feel comfortable with.
Advisors that I’ve spoken with that have not been exposed to impact investing seem to perceive it as a “vanilla vs. chocolate” debate. They think that clients will be in or out, when the reality is that they may have an appetite for including SRI investments. From an opportunity and asset allocation standpoint, it would be remiss to overlook SRI just as it would be remiss to overlook emerging markets or International bonds because you are not knowledgeable about them. It cannot hurt to bring up SRI as one the fastest-growing parts of the financial services industry.
Some advisors fear they will be stereotyped if they promote impact investing, but we aren’t bringing it up as advisors just because we want to change the world; it’s primarily about helping people achieve their goals and dreams through their investments. If the investment can make the client money while positively impacting the world, then why not? If I didn’t believe that it made sense financially, I wouldn’t be counseling people to put their money into SRI investments.