Teresa Wells co-leads the firm’s Seattle office at Tiedemann Advisors and has direct responsibility for managing client relationships. She works closely with clients to understand their goals and objectives; manage their investments, including impact investing; and integrate their investment strategy, philanthropy, and estate planning into a cohesive wealth management plan. She serves as a member of the firm’s Internal Investment Committee and is also on the Diversity, Equity, and Inclusion Committee.
Russ Alan Prince: How has the impact landscape changed both from a demand perspective and investment opportunities?
Teresa Wells: Both continue to evolve and expand rapidly. There is an interesting paradigm taking shape where the demand for and supply of thoughtful, creative, intentional impact offerings are creating a prosperous cycle. Investors are increasingly more aware of the power that capital decisions wield—where they spend, how they give, and how they invest. That increased awareness causes them to seek solutions that align with their values, allocating resources to solutions that support their vision for the world. This shift has obviously been noticed by the asset management field, which—for better or worse—has meaningfully expanded the number of impact investment solutions available to investors. As the number of impact investment solutions increases, it takes a careful eye to weed through this universe and separate the wheat from the chaff. The good news is, that there truly are more and more compelling options for impact investors to legitimately drive positive change.
Importantly, the field of impact investing has more inherently understood that capital can have purpose across a very wide spectrum of risk and return expectations—where one can apply more adaptive thinking around what “risk” really means and how to value it. Through adaptive thinking around risk and return, away from more singular historical norms and benchmarks, the field is innovating new ways of deploying capital that starts with the desired impact, then determines the kind of capital best able to achieve it. This opens up a whole new realm of expansive, creative thinking in the design of impact investments.
What’s really exciting is that once investors get introduced to these creative, innovative investment solutions they realize what’s actually possible—that they can actually INVEST in alignment with the change they seek in the world—and it fosters even greater demand and more product innovation. And so goes that prosperous cycle.
Prince: Why is gender-lens investing growing in importance?
Wells: Women’s drive towards economic and social empowerment is not new, but women’s awareness of the issues and capacity to do something about them, has changed meaningfully. The #MeToo movement of 2017, broad social awakening movements starting in 2020, and the potential fall of Roe vs. Wade in current headlines all contribute to the increasing general awareness around issues facing women today and that’s just in this country. Equally as important, is the vast bodies of research now disseminating information on the economic power women possess and will increasingly control, and on their invisibility. It is worth noting here that the use of the term “women” is largely a function of the field research and nomenclature used most broadly. I want to be clear that our strategy aims to be inclusive of queer, transgender, and non-binary communities as many of the issues we are trying to solve are intersectional.
That said, research from the Federal Reserve, Gallup Polls, and the US Bureau of Labor Statistics found that women now control over $31 trillion in consumer spending globally, more than 60% of all personal wealth in the U.S., and approximately 40% of U.S. working women out-earn their male partners. Women have shown a greater proclivity toward making values-based decisions, so as we retain more control around our financial lives, there has been an increased demand for investments aimed at improving the lives of women and girls.
Frankly, there’s a strong investment case for doing so. McKinsey Global estimates that the world could gain upwards of $28 trillion in annual GDP globally if we could somehow close the labor market gaps between men and women—a 26% increase over maintaining the current status quo. Numerous studies reflect that companies founded by gender-balanced teams tend to outperform, create more and better-paying jobs, and offer greater returns to investors. So, investing with a mindset towards greater empowerment and equity for women makes strong financial sense, period.
Prince: What challenges do gender- and equity-lens investing face?
Wells: One of the greatest challenges, particularly within publicly traded markets, is around data. First, there is no easily measured and attainable piece of data one could use to make an informed decision about which company is offering a safe, equitable, and empowering workplace for women and/or people of color. When sorting through the sea of investable securities, it’s hard to choose one versus another on this basis without intensive research. Unfortunately, many solely rely on more readily available diversity statistics—basically, counting the number of women or people of color represented in management or on a board of directors. While a seat at the table is a move in the right direction, it’s just not enough. There is no compelling empirical evidence correlating greater diversity in organizational leadership to more empowered decision-making, greater safety, or better equity in compensation. Good data around true cultural equality is scant and hard to come by, so the field has work to do to improve public disclosure around the “S” in ESG.
Prince: How does impact—gender lens—investing fit into broader wealth management? What else do you look at besides investment strategies?
Wells: Here at Tiedemann, we take a very holistic view of wealth management, integrating a client’s goals and values throughout all our work with them, which extends much further than their portfolio or investment strategies. We believe all capital has an impact and we work with clients to help them define and activate their theory of change across their philanthropy, investments, planning, and legacy. We strive to understand the issues dear to them and integrate their vision into a holistic wealth plan that best drives positive real change.
We also specialize in family wealth education and shared decision-making; helping families define a shared set of values and offering tools for cohesive stewardship of family wealth. Those seeking to enhance gender equity and empowerment in the world should start in their homes. We often create shared learning opportunities within families to help foster that awareness and shepherd the next generation into the conversation. Bringing all members of a family—irrespective of their gender—to the table to respectfully discuss and opine on the family’s wealth, goals, and values is a great way to foster an empowered next generation of gender lens investors.
Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He consults with family offices, the wealthy, fast-tracking entrepreneurs, and select professionals.