Sustainable, Impact Investing Assets Surge - Study reports

This week, I am running three Sustainable Investing events with our experts from New York and Switzerland. This article on Sustainable investing and the rapid uptake of funds came across my desk today. It is written by one of my favourite editors, Tom Burroughes, Group Editor, Family Wealth Report.  The full article was posting on November 5, 2018:

The trend of ESG and impact investing continues to build momentum, according to figures from the US.

Investments that are deemed sustainable or that achieve certain impact beyond purely monetary results are now worth $12 trillion in the US, new figures show, a quarter of all the total assets managed professionally in the country, and a 38 per cent jump from just two years ago.

The data comes from the US SIF Foundation’s 2018 biennial report on such trends. Since the report was first issued in 1995, when sustainable/impact investing accounted for about $639 billion of AuM, the market has surged 18-fold.

Such ways of using investment muscle are gaining ground because, advocates say, they appeal to people who want to not just accumulate savings for the long term but to address issues such as pollution, crime, educational failure and mistreatment of women, among other concerns.

The latest report identified $11.6 trillion in ESG incorporation assets under management at the outset of 2018 held by 496 institutional investors, 365 money managers and 1,145 community investing financial institutions. The largest percentage of money managers cited client demand as their top motivation for pursuing ESG incorporation, while the largest number of institutional investors cited fulfilling mission and pursuing social benefit as their top motivations.

“Money managers and institutions are utilizing ESG criteria and shareholder engagement to address a plethora of issues including climate change, diversity, human rights, weapons and political spending,” Lisa Woll, US SIF Foundation CEO, said.

Retail and high net worth individuals are increasingly utilizing this investment approach with $3 trillion in sustainable assets, the US SIF Foundation reported.

2 Changes to Estate and Tax Law in Ontario

The recent changes to Ontario estate law and U.S. tax law might impact families with wealth. These 2 new changes are worth reviewing:

1. For those of you with multiple wills (used commonly to avoid Probate) should review their Wills. A recent decision, Re Milne, rendered a Primary Will void because it contained a commonly used provision that gave the Trustee discretion to determine what assets to include in the Primary Estate. As a result, multiple wills are only valid if the assets that comprise each of the Primary and Secondary Estate are defined with sufficient certainty. This decision is currently applicable in Ontario, but it is possible that it could be applied in other provinces.
2.  U.S. citizens in Canada may be impacted by the changes to the Tax Cuts and Jobs Act, specifically the global intangible low-taxed income (GILTI) tax. U.S. GILTI tax is relevant for any U.S. Shareholder owning 10% or more of a controlled foreign corporation (i.e. a Canadian Corporation with US shareholder). U.S. Shareholders in that situation may have a one-time 15.5% tax, plus they must include in income such profits in excess of a 10% return annually on depreciable tangible assets owned by the corporation whether or not a distribution is made to the U.S. Shareholder.

 

Clients with wealth need to know you see their needs first

We are striving to talk to clients the way they think about their money, not the way we do. Many advisors jump into talking about themselves, how they have been doing their role for 20 years and so forth.  This does not give the client ease of mind.  The client wants to know that you see them and you understand their special circumstances, not that you are shoehorning them into a standard "solution".

Clients feel their money “has a job to do” – to help them develop and educate their children, care for their parents, fund their businesses and homes, spin out a monthly cash flow, etc. In our client relationships, we are focused on helping our clients achieve their desired outcomes – offering the right capabilities, removing complexity and truly listening.

Our clients have their best practices in managing their wealth. This mutual sharing of knowledge has developed the wealth management practices over the past 150 years and this is a responsibility we take very seriously.

Family Wealth: 5 Essential Questions

Having listened to many families of wealth and seeing their family situations, for better or for worse, it does appear that money can impact also for better or for worse. After creating their wealth, entrepreneurs then are concerned about investing, but their overriding concern is the impact on their children. How will the new money affect them? 
Actually, it worries them deeply and we have all heard stories of families who had wayward next generation due to the wealth. What should a wealthy family do?

Listening to entrepreneurs who have sold their business and received an eye watering amount of money, I notice that the great families tend to ask themselves these six questions. 

1.       What is really important to our family?

2.       What are our family’s true assets?

3.       What should I do to guide and support the life journey of each of my family members over time?

4.       How wealthy do I want my children to be?

5.       Do I feel any responsibility to society?

You might also ask what sort of family do you want to be? What do you want - both with family legacy or family stories? Even the answer from your children might be – "meh" – and that says a great deal.

What legacy do you want to leave your children? What about a legacy left for society? Deciding where you want to go with your financial success and why you want to meet those goals will get your strategy going. Determining how to get there and which legal arrangements to use are secondary tactical decisions.

Your financial wealth a is wonderful vehicle to help your family do a shared goal.  In my experience, families who go through this process achieve better results – financially and emotionally.

By the way, my definition of a successful family is one that knows who it is, what it stands for and where it is going. Successful families manage themselves deliberately.  There is a lot at stake for families and each family member. If you and your family can define what is significant, before doing, then your next generation have an excellent chance of thriving.

A staggering amount of wealth has been created in the USA and inheritances given, foundations endowed and legacies created.  The wealthy family is trying to find this other dimension more and more.

The other question, after answering "what is important", is what will be the impact on my children and heirs? I often think that the second question is more important. It is also far more unpredictable. It is why you want to know the life lessons of the best entrepreneurs and how they have managed their family wealth.

 

Christiane Amanpour honoured for her media stories dedicated to Peace

Christiane Amanpour was honoured by Daughters for Life at a gala dinner held at The Carlu in Toronto. She took the opportunity to give the message of peace and to see others as human and not "the Other".

Christiane knows first hand about politics and the power it holds over behavior. She is Iranian and was educated in Britain, during her youth.  This early experience of different cultures, and not quite fitting into the community, gives her a deep insight into belonging and how politicians can warp their people's minds.

Christiane Amanpour, CNN, and Jacoline Loewen, UBS Bank (Canada)

Christiane has an admirable career and here are a few reminders of her assignments around the world to the hot spots of the world:

During her early years as a correspondent, Amanpour was given her first major assignment covering the Iran–Iraq War, which led to her being transferred in 1986 to Eastern Europe to report on the fall of European communism.

1990:

Following Iraq's occupation of Kuwait in 1990, Amanpour's reports of the Persian Gulf War brought her wide notice while also taking CNN to a new level of news coverage.

1992:

On 22 December 1992, during the Bosnian War, Amanpour was reporting from Kiseljak, not far from Sarajevo.e Amanpour, CNN Global Head of Media,

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