It’s always important for investors and their advisors to know what you own, but for gender-lens investors, it’s just as important to know who owns what you own. Investors should ask their advisors about diversity within the advisory practice as a starting point, given the many studies that have confirmed the performance value of workplace diversity over the past 10 years.
“How is diversity represented in your company?” is an important and smart question for investors to ask. “Who owns the flow of capital and how diverse is the flow of capital at this company?” is valuable investor information today.
Ellis: What is your process for advocacy around these issues?
Farrar-Rivas: Where we begin today is to ask the questions and collect the data. We then use that data to decide what additional funds and managers can be added for balance related to issues like company leadership and workplace demographics. Gender diversity is also important related to who manages a fund’s portfolio.
We want to see the democratization of gender-lens investing so there are more choices across all categories, from SMAs to mutual funds to ETFs, with the capability of getting the research that applies from data providers like Bloomberg. It’s also important to see growth in the more traditional distribution channels, which is beginning to happen.
Paul Ellis founded Paul Ellis Consulting to work with financial advisors who want to integrate sustainable and impact investment strategies for their clients.