The End of the Tassel-Loafered Broker

By Dale Wannen

This is the first generation that will be able to tilt the entire investment field toward sustainability. They will do it by keeping their hard-earned dollars away from the firms that got their parents and grandparents into a financial mess.

Having a conversation with my 19-year-old niece last week, I was struck by her statement that she does not understand why anyone would want to drive a car in this day and age, with entities like Lyft and Uber making it so easy to get around, plus the fact that traffic is “ridiculous.” This got me thinking about the shift in perspective that has taken place between older generations and that of my niece. She is not alone in her opinions; in the last few years, the number of cars purchased by people ages 18 to 34 fell almost 30 percent.

Just as Ford and GM are scratching their heads over how to sell cars to this generation, the big banks and brokerage houses are wondering how they can “get in with the cool crowd.” But after witnessing the recent “too big to fail” economic calamity and the outrageous paychecks of bank execs, Millennial investors (18–32 years old) are simply not interested in working with the traditional big brokerage firms that their parents or grandparents have been using. Enter the world of impact and sustainable investing, which includes the divestment movement.


Almost as popular as Justin Timberlake’s videos on YouTube, the divestment movement is moving full steam ahead as more than $3 trillion has been committed to it. Just to put that into perspective, the size of the world’s stock markets is about $70 trillion, so a fairly quick 4-percent shift has occurred. According to the nonprofit and its project Go Fossil Free, more than 500 institutions, including many of the universities that Millennials attend or have attended, have committed to divesting from fossil fuel companies.

The divestment movement is raising the eyebrows of many of the established brick-and- mortar banks — and rightfully so, as the socially conscious Millennial generation will be inheriting more than $30 trillion from their Baby Boomer parents and grandparents over the next 45 years.

So who is doing this divesting? Among others, the world’s biggest sovereign wealth fund, held by Norway, and two of the world’s biggest pension funds, in California. Hollywood is even getting in on the act, as actor Leonardo DiCaprio recently reported divesting his personal wealth and his charitable foundation’s funds from all fossil fuel companies. Star Natalie Portman also requested that her alma mater, Harvard University, divest from fossil fuels. The shift will continue as not only large institutions but also Millennials inherit assets.

The current movement seems to be gaining momentum rapidly. One out of every eight dollars invested now follows a social or environmental mission. Millennials are driving the concept of dual investment objectives by seeking market returns that also help build a better world for future generations.


Many young investors really do not know where to start when researching sustainable investing. In recent years, many “robo-advisors” have launched and grown rapidly, but in terms of investing with a conscience, many of these firms fail. In fact, Millennials have access to enough information online to realize that these firms are simply in the business to gain revenue and market share, and not because they share their values.

Young investors can start by taking a look at their mutual fund positions to get an idea of what fossil fuel or coal mining companies might be lurking there. The recently launched Fossil Free Funds ( makes it fairly simple to find out whether that Vanguard or Fidelity fund holds those evil rms. Mutual fund companies such as Parnassus and Ariel already do the screening for their clients, who gain peace of mind knowing that firms like these have been participating in sustainable investing since before it was popular with the big broker houses that are getting involved now. For many investors, of course, the task of setting up an asset allocation and rebalancing schedule is simply too daunting and time-consuming. They can hire an investment advisor who is fully aligned with integrating environmental, social, and governance criteria (ESG) with stocks, exchange-traded funds, and mutual fund positions, along with creating financial plans.

As ESG gains momentum and interest, there are many different vehicles for sustainable investment emerging that may interest new investors. My firm, Sustainvest Asset Management, recently launched the Sustainvest Fund, which integrates both the long and short approach to investing and ESG. This fund is unique in taking a step beyond the traditional exclusionary screens (oil/tobacco/ gambling) and inclusionary screens (strong waste management programs, energy efficiency) by also shorting firms that rank poorly or show a lack of commitment to ESG. The idea is to join with investors whose values align in trying to capitalize on firms or industries that are clearly showing weak growth prospects that could potentially negatively affect the stock price. For example, if we truly feel that a particular company, like Coca-Cola, has poor long-term prospects, then the value of its stock may depreciate, and there is an opportunity to gain value by shorting a company. The long/short approach to investing is nothing new, but applying an ESG filter on top of this approach is unique and may align with investors’ moral and financial fortitude.


The big brokerage houses are struggling to appeal to Millennials, and only time will tell how members of this generation will react with their dollars. Transparency of information via social media and the plethora of online resources enable them to make their own decisions, and to find out which firms are authentically aligned with the mission of sustainability and which are simply getting into this segment because they need to. The cufflink and tassel loafer-wearing brokers will quickly be pushed aside as the shift of assets from one generation to the next gets underway.

This is the first generation that will be able to tilt the entire investment field toward sustainability. They will do it by keeping their hard-earned dollars away from the firms that got their parents and grandparents into a financial mess. Sustainable investing is another arrow in the quiver for young professionals looking to fully align their lives with their standards.

This article appeared in Issue 7 | May/June 2016

Issue 7 features exciting interviews and profiles all focusing on youth and Millennials including: Sweetgreen; Radha and Miki Agrawal; Nisolo; a spotlight on the higher education system including a look at the student debt crisis and the top 15 sustainable MBA programs; and our inspiring cover story — Nikhil Arora and Alejandro Velez of one of the most exciting food companies in the nation, Back to the Roots.

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