'“I sometimes joke that there are way more socialists who need a financial adviser than there are socialist financial advisers.”
Andrea Pien is a 35-year-old millionaire. A wealth manager once warned her to carefully steward her money, saying that inherited wealth was often squandered away in just a few generations. “But my partner and I aren’t planning on having children,” Pien said. “What are we hoarding money for? Especially when the world is literally burning.”
So in March 2020, Pien hired Phuong Luong, founder of financial planning firm Just Wealth, to help her redistribute some of her wealth back to society. That means taking some of it out of Wall Street and investing it in ventures that promote human well-being and economic fairness over profits.
Pien is one of a small but growing number of wealthy people seeking a more radical approach to investing. Some call it the seemingly contradictory term “anti-capitalist” investing; others refer to it as “transformative investing.” In general, proponents are going beyond merely disincentivizing unethical behavior in companies. They’re trying to shift more of the balance of financial power into the hands of the working class, transforming an economic system that they believe has unjustly given just a few people control over a majority of the capital. Some investors want to spend down all of their wealth through anti-capitalist investing, while others still want to get a return on their investments but make sure these investments are into ventures they feel promote social justice.
Financial professionals in the space say they’ve seen rising interest in this kind of investing strategy in recent years, and they attribute some of the interest to social justice becoming a bigger priority in the aftermath of the 2020 racial justice reckoning and a deeply unequal pandemic that killed so many Black and brown working-class people.
Another factor fueling this small shift: A lot of money is changing hands in the US right now. Over the next 25 years, American baby boomers will pass on some $68 trillion to their children. It will be the biggest wealth transfer in US history, but the money won’t be handed out evenly. Even more wealth will get concentrated at the top.
[...]
“I sometimes joke that there are way more socialists who need a financial adviser than there are socialist financial advisers,” said Zach Teutsch, a financial adviser and founder of Values Added Financial, a financial advisory firm for progressives. “People are really yearning for this. They want an adviser who shares their disdain for a US economy that’s dominated by obscenely wealthy multi-billionaires.”
[...]
As transformative investing grows, even if it remains a niche part of the financial market, emphasizing how it’s different from other kinds of ethical investing will become even more important, especially if it wants to avoid the haziness that surrounds socially responsible investing. As of now, the latter is vastly more popular. In 2020, almost 36 percent of professionally managed assets globally were classified as socially responsible investments. Within this category, environmental, social, and corporate governance (ESG) integration was the most popular strategy — a little over $25 trillion in assets used ESG integration in 2020. This includes factoring in a company’s carbon footprint or how well it treats employees when calculating the risk or return on an investment, because such factors could impact the financial performance of the business. ESG doesn’t necessarily prioritize social values over financial performance.
"“I want the future to look like everyone having a little bit more than enough”"
[...]
While no one seems to be under the illusion that radical investing alone will solve the problem of wealth inequality, the emergence of this trend suggests that the next several decades may be transformative for the financial services industry. For a small number of wealthy young Americans coming into inheritances, it isn’t enough to donate to a few charitable causes — one of the loudest critiques of big philanthropy is that it lacks transparency and is undemocratic. They’ve recognized a need to move beyond feeling guilty about their own privilege and the profound inequality that exists in the world. They’re attempting to alter the power imbalance in the relationship they have with others, and feel as though they’re part of a community that’s not just connected by wealth.
[...]'
https://www.vox.com/recode/23141993/anticapitalist-investing-rich-heirs-explainer
Andrea Pien is a 35-year-old millionaire. A wealth manager once warned her to carefully steward her money, saying that inherited wealth was often squandered away in just a few generations. “But my partner and I aren’t planning on having children,” Pien said. “What are we hoarding money for? Especially when the world is literally burning.”
So in March 2020, Pien hired Phuong Luong, founder of financial planning firm Just Wealth, to help her redistribute some of her wealth back to society. That means taking some of it out of Wall Street and investing it in ventures that promote human well-being and economic fairness over profits.
Pien is one of a small but growing number of wealthy people seeking a more radical approach to investing. Some call it the seemingly contradictory term “anti-capitalist” investing; others refer to it as “transformative investing.” In general, proponents are going beyond merely disincentivizing unethical behavior in companies. They’re trying to shift more of the balance of financial power into the hands of the working class, transforming an economic system that they believe has unjustly given just a few people control over a majority of the capital. Some investors want to spend down all of their wealth through anti-capitalist investing, while others still want to get a return on their investments but make sure these investments are into ventures they feel promote social justice.
Financial professionals in the space say they’ve seen rising interest in this kind of investing strategy in recent years, and they attribute some of the interest to social justice becoming a bigger priority in the aftermath of the 2020 racial justice reckoning and a deeply unequal pandemic that killed so many Black and brown working-class people.
Another factor fueling this small shift: A lot of money is changing hands in the US right now. Over the next 25 years, American baby boomers will pass on some $68 trillion to their children. It will be the biggest wealth transfer in US history, but the money won’t be handed out evenly. Even more wealth will get concentrated at the top.
[...]
“I sometimes joke that there are way more socialists who need a financial adviser than there are socialist financial advisers,” said Zach Teutsch, a financial adviser and founder of Values Added Financial, a financial advisory firm for progressives. “People are really yearning for this. They want an adviser who shares their disdain for a US economy that’s dominated by obscenely wealthy multi-billionaires.”
[...]
As transformative investing grows, even if it remains a niche part of the financial market, emphasizing how it’s different from other kinds of ethical investing will become even more important, especially if it wants to avoid the haziness that surrounds socially responsible investing. As of now, the latter is vastly more popular. In 2020, almost 36 percent of professionally managed assets globally were classified as socially responsible investments. Within this category, environmental, social, and corporate governance (ESG) integration was the most popular strategy — a little over $25 trillion in assets used ESG integration in 2020. This includes factoring in a company’s carbon footprint or how well it treats employees when calculating the risk or return on an investment, because such factors could impact the financial performance of the business. ESG doesn’t necessarily prioritize social values over financial performance.
"“I want the future to look like everyone having a little bit more than enough”"
[...]
While no one seems to be under the illusion that radical investing alone will solve the problem of wealth inequality, the emergence of this trend suggests that the next several decades may be transformative for the financial services industry. For a small number of wealthy young Americans coming into inheritances, it isn’t enough to donate to a few charitable causes — one of the loudest critiques of big philanthropy is that it lacks transparency and is undemocratic. They’ve recognized a need to move beyond feeling guilty about their own privilege and the profound inequality that exists in the world. They’re attempting to alter the power imbalance in the relationship they have with others, and feel as though they’re part of a community that’s not just connected by wealth.
[...]'
https://www.vox.com/recode/23141993/anticapitalist-investing-rich-heirs-explainer
