In one of the recent Invest for Better Circle meetings of my Boston group, the question emerged: “Is the role of the advisor to lead or follow you?” Circle members Amy Brakeman and Maria Jobin-Leeds had a lot to say on this topic, so I asked them for an in-depth interview to dig deeper. As you’ll read, their responses indicate an evolution in their thinking and experience over time.
Ellen: You’ve both been at this business of investing for good for a while. When you were first looking for impact investing advisors, what qualities were you looking for?
Maria: It was 20 years ago when we first came into this money and I really had no experience. Luckily, we had some time to be methodical about it. I was looking for someone who would look at me (as a woman), be kind to me; who I would feel safe and respected by. I was looking for someone local, who I could have a relationship with. And we were looking for someone who would do good with the money; I think we called it SRI back then.
We interviewed 4 teams; all of whom were either led by or included females. One guy, however, never looked in my eyes; so he lost the job in 5 seconds. The choice we made included an all female team, including a leader who took a lot of guff when she pushed SRI so many years ago and I really wanted to support her. I continue to adore them and find them respectful, values-centered and welcoming. Later, after the 2008 market crash, we added another research-driven advisor to work with the Foundation, and were happy that the staff included two progressive people of color.
Amy: For me, the money was and wasn’t sudden. My husband was a professional money manager and, in the beginning, we used to talk about all of our investments. As time went by, I got more focused on philanthropy. When we got divorced, I suddenly had cash that needed to be invested. In looking for an advisor, I didn’t care about geography but they had to be in the top quartile of impact investing advisors; and not just doing ESG in public markets. I care about deeper impact through all asset classes and across all pockets of assets. I didn’t want anybody affiliated with a big bank or who sold product. Given this frame, I mainly found small shops which can be vulnerable to having their business model work so there can be turnover of individual advisors and mergers. It felt like a high stakes decision that couldn’t switch if it turned out wrong – which I’ve learned is not true. I prioritize what my network recommends and I kept hearing about a few advisors from folks in the Toniic and Gratitude Railroad networks. It was at one of those meetings that I ran into both finalists and decided to go with the one that I thought I could have more of a personal relationship with. My lead advisor is excellent; someone who is super connected and committed, who can blend investing and philanthropy.
Ellen: Now that you’ve been at it for a while, have your views changed on the qualities that you want in your impact investing advisors?
Maria: I’m a different person 20 years later. I have more confidence and gender isn’t as important to me. As I keep my eyes open for additional advisors, I have people on the list who aren’t local but I still want a relationship and see them face-to-face. I will press them more on the specifics, their definition of impact and their metrics – which I couldn’t have done initially. At that time I was more focused on finding someone who could make me competent enough to give direction!
Here’s an example of how I have changed and this informs my thinking about what I would want in an advisor. I remember getting into a 1 hour discussion with one of my advisors who didn’t think that I should put more into CDFI’s because of the impact on my asset allocation. I was practically in tears, because I wanted to put money at the local level in the hands of people of color, but realized that my advisor had been trained for years with this mindset and I was bumping up against it. After a few days, I decided to do it anyway.
Amy: In the first few years, my advisors led me, which is what I wanted. I wanted them to help me shift quickly from cash to a diversified impact portfolio. I would add a few investments from my networks in Africa and work on education to employment. So all was going well generally. However, I noticed that the private funds and direct deals I added to the pipeline would get stuck in due diligence.
During Spring 2020, when I saw the Covid-related health disparity outcomes along racial lines, I started being far more assertive in my investing. As I sourced and wanted to proceed with funds led by Underrepresented People of Color who were launching new funds or ventures, I was often told “Wait until Fund II.” At this point, I dove in to lead and approve selected private investments. Interestingly after my decision to invest in specific funds, other investors at the same advisor would invest also.
In 2021, I have also added two “satellite” advisors to my core advisor so that I have access to a bigger and relevant pipeline and a DD process that meets my strategy around being more redistributive in getting capital and returns to people who have been systematically denied access. My goal is not to make as much money as I can; my goal is to make as much impact in the world while at the same time earning enough for my lifetime. I am risk tolerant and have become aware that the financial system is risk averse and isn’t going to move as fast as I want it to. My new approach is working very well.
Maria: That is a critical change point that not everybody gets to, but I’m also at that point. All of the things I wished for in that first phase are not adequate for the second phase. How do you find someone who doesn’t have that box around them? The bulk of what they are doing is incrementally improving on Capitalism 1.0. I’m looking for 2.0 and they are harder to find and to some degree it becomes a partnership in this phase.
Ellen: What do you think is the role of the asset owner – you – in influencing the impact advisory field? What about groups like Invest for Better?
Maria: We have a remarkable ability to change our advisors and that will change the field. One of my key advisors developed expertise in this because clients were whining about it. She told me that she loved it when I would ask for things because she improved, and the firm improved. In fact, she became so competent, she was snatched away by a major asset owner!
Amy: I agree completely. And I think that Invest for Better Circles makes for better consumers; if more of us assert our needs; then we will change the system. Then Maria and I won’t be the outliers talking to our advisors. IFB Circles can give more women voice and power, and then the whole advisory system will offer more.