53: How to Understand Impact Investment & Wealth Management in the Simplest Terms

Guest Bio - David O’Leary
David is a wealth management expert, impact investment professional, public speaker, and writer. David spends his time as Founder & Principal of Kind Wealth, a holistic wealth management practice helping early to mid-career Canadians manage their money in a way that matches their values. (See full BIO at the end of the notes)

Summary

This is yet another  fascinating episode that covers so many questions:
What is the role of a wealth manager? Or an Investment Manager? Or a Financial Planner? 
What is the fiduciary duty? And what is the duty of the pension funds and other institutions that are the largest investors in the world? 
And from a personal perspective, what are some of the best things the “average” person can do to “vote with their dollar”? Do you have to be a high-stakes, risk-taking investor to make a difference? Or can you be involved from early career stages to shape the future world into a sustainable landscape and impact wealth reality?
What is the best intersectionality between advisors and clients? How do we measure impact, the access and the inclusion to products, services and the effect they are having on people, the environment and the returns? 
These and so many more topics are covered during this in-depth episode. Enjoy! 

Key points

• The definition of “impact investment” and the spectrum of capital: where or how you want to participate is your personal choice based on your wealth management goals.
• Somehow, sustainable investment and profit-generation became mutually exclusive, but it doesn’t have to be.
• The impact of having a theory of change
• Whatever it’s called, when your approach to wealth management includes using finances to better the world, your investments will be healthier than if you were only trying to get more money with little regard to how profits are generated.
• Milton Friedman vs Real Sustainable Fiduciary Duty
• Brow Stocks and the prisoners’ dilemma 
• Key definition: Investment Management vs Financial Planning 
• The Intersectionality of wealth managers and clients
• Measuring Impact, Qualifications & God’s call

Time stamps

[6:09] How David defines sustainable and impact investment

[9:04] The spectrum of defining “impact investment”

[18:07] The real intent of fiduciary duty vs the old Milton Friedman interpretation 

[21:30] Brown stocks perform worse than sustainable ones 
[24:10] Short-term vs. Long-term wealth management plans

[31:35] The age range (and reason) of people who have been most historically underserved in quality financial advice

[33:33] Investment management vs financial planning: two separate personal finance issues that have traditionally been erroneously combined, now should be intentionally treated separately

[41:00] Wealth managers & advisors tend to serve people like themselves  
[42:00:] Measuring Impact, underrepresented groups, access & inclusion 
[50:37] The Bottleneck: Perfect is the enemy of good - Financial advisors vs. ESG investments
[56:00:] Some relevant qualifications in the UK and Canada 

[1:00:35] David working in Sierra Leone on microfinance projects, how that relates to impact investing
[1:02:00] World Vision and the work of missionaries
[1:05:00] Call to action

Useful links

JP Dallmann on Forbes

David O’Leary’s website
Connect with David and listen to his podcasts - Sign up at impactinvesting.how

Kind Wealth website https://kindwealth.ca/team/

Andrew Parry on the Impact Leaders Podcast
World Vision website https://www.wvi.org

Milton Friedman on Wikipedia
Theory of change on Wikipedia
Logframe - Logical Framework Approach
CFA Institute Website
Certified Professional Impact Analyst (CPIA) designation at Queens University

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Important:

The content shared on this podcast does not constitute a request, offer, recommendation or solicitation of any kind to buy, subscribe, sell or redeem any investment instruments or to perform other such transactions of any kind.

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About the Guest - David O’Leary
David is Founder & Principal of Kind Wealth, a holistic wealth management practice helping early to mid-career Canadians manage their money in a way that matches their values. David also produces and hosts The Impact Investing Podcast and is a frequent speaker at conferences and in the media (The Globe & Mail, The Toronto Star, BNN Bloomberg, CNBC Africa, etc.).

Previously, David was Managing Director of Origin Capital, the impact investing division of World Vision Canada. Prior to that he co-founded Eden Valley Partners, an advisory practice managing discretionary portfolios and providing financial planning to high net worth Canadians. David spent the first 13 years of his career with Morningstar in both Canada and South Africa in a variety of Director level roles where he specialized in Investment Manager Research.

David holds a BA in English Literature from the University of Toronto, an MBA from the Rotman School of Business, the Chartered Financial Analyst (CFA) designation, and the Qualified Associate Financial Planner® (QAFP) designation. He is also working toward the Certified Professional Impact Analyst (CPIA) designation at Queens University. 

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David’s short life story

In clichéd fashion, my life was transformed when I met a girl. I know, boy meets girl, how original! But her influence led me to take a six-week sabbatical from my job on Bay Street to spend that time volunteering in Sierra Leone with one of the world’s largest humanitarian organizations. My goal was to learn about how they were using microfinance to help end poverty. 

The trip was an emotional roller coaster that left me, at once, angry, sad, inspired, and motivated to do something about the appalling inequality I had witnessed. I didn’t realize it then, but two years later I would move to South Africa. Four years after that, I would quit my job in the institutional investment world and move home to pursue work that I felt could make a bigger social impact.

This work included co-founding a traditional financial advisory practice that integrated philanthropy with financial planning for retirement-age Canadians. It also included three years leading the impact investing division of the same INGO I had volunteered with all those years ago in Sierra Leone. During this time, I spent evenings and weekends working to get Kind Wealth off the ground.  

I’m passionate about Kind Wealth because during my 20 years of working in financial services, I came to see the underbelly of the industry and the many ways in which it took advantage of clients, the very people it claims to serve. I have also built a deep understanding of how people’s money choices impact the world around us: whether it be decisions about saving, spending, investing, or donating, it all leaves a footprint, for better or worse. I am excited to be building a wealth management practice that actually lives out its values, treats clients fairly, and helps them reach their financial goals in a way they can feel good about. 

On a personal note, I am a passionate advocate for equality of all stripes but maintain a particular focus on fighting for gender equality and against wealth inequality. I have a wide set of eclectic and often incongruous interests. In what feels like a lifetime ago, I was a competitive boxer in both Canada and South Africa. As such, I spent a great many hours punching other people in the face. Yet I’ve spent even more time traveling to developing countries trying to understand the root causes of wealth inequality and how I could help tackle it. 

In recent years I have been on a quest to simplify my life, be content with less, and stay mindful of the impact my life choices have on the world around us. I am currently working on eating less meat and reducing my family’s consumption by purchasing or bartering for second-hand goods. Oh, and in case you’re wondering, that girl I mentioned at the top of my bio, the one who changed my life, I ended up marrying her and having two strong-willed, socially conscious girls together. 

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Important:

The content shared on this podcast does not constitute a request, offer, recommendation or solicitation of any kind to buy, subscribe, sell or redeem any investment instruments or to perform other such transactions of any kind.