Joel Solomon and the Clean Money Revolution

by: EJ on 04/10/2019

Joel Solomon, author of The Clean Money Revolution: Reinventing Power, Purpose, and Capitalism, explains why wealth managers need to expand their mandate and how those of us with "more than enough" have a responsibility to discuss values and demand clear explanations about how that money is working in the world and to what end.

When  you start to question the system you find structural obstacles. In the clean economy transition, laws and regulations can block progress. Many regulations are written to serve special interests. Other times change is blocked by a lack of visibility, where the dark consequences of our economic actions are hidden in far-away places. We end-use consumers and investors understandably prefer to trust professionals around complex topics, and we often have no idea what realities are behind what they’re buying on our behalf. You could be funding oppression of indigenous peoples, toxic dumping, or slavery. Examples of these are embedded in the supply chain of many large profitable companies in the world today. Annual reports to shareholders focus on other aspects of the business, ones designed to boost their stock price. Senior executives, big financial houses, and investors focus on the allure of the highest return rate.

Residential schools for First Nations. Segregation. Debtors’ prisons. These mass tragedies and many other outdated norms should remind us to not get too comfortable in our assumptions about what is done in our names. We need to understand what we are invested in or supporting with our money, and challenge practices that we know are wrong. Modern digital information makes it easier to know what our money is doing, and to search out better alternatives. We have weaker excuses now; “I didn’t know” has become less convincing. We have access to vast information, as do our managers. Our job is to ask questions and give direction. Those who own large amounts of capital can afford to be informed about their money. At the very least, we can place our money with a manager with proven commitment and success that offers cleaner money as a first assumption. We have a moral responsibility to do so.

Historically a wealth manager’s sole mandate has been to make more money for those who have it. We need to expand that mandate, so that money managed for personal security is also managed with an eye to the greater wealth of the world. If that sounds pie-in-the- sky today, it won’t in twenty years. Maybe sooner. Sadly, the “make all you can, then give some away” view remains prevalent. Close friends believe it. Good people of all kinds do. Perhaps the reason is because most of us only see minimal, under-proven options. That’s why the financial sector is so ripe for innovation and building cleaner products...

Those of us with “more than enough” have a rational responsibility. When we see the need for change, we have the power to influence that change. Do you know where your money is? Do you ask wealth advisors questions about the practices of companies they support with your dollars? Do you make your values clear and insist your advisors act upon them?

If you are metaphorically “patted on the head” when you talk about values, consider another manager. Condescension is not a legitimate response. Demand clarity, and speak your truth. You can help your manager by empowering them toward ethical investing. And if you see few advances in their thinking about screens and values-based investing, notice that and think about moving your money.

If you’ve ever felt embarrassed because you can’t understand your money manager’s language, make them explain things that confuse you. Demand translations of obscure language and terminology designed to wear you out and make you believe in their expertise. If your advisors can’t explain in clear English what they’re doing and why, you should think twice about giving them your money. In Michael Lewis’s nonfiction book on the subprime meltdown, The Big Short, one man talks about going to investment meetings with his boss, Steve Eisman:

“Steve’s fun to take to any Wall Street meeting. Because he’ll say ‘Explain that to me’ 30 different times. Or ‘Could you explain that more, in English?’ Because once you do that, there’s a few things you learn. For a start, you figure out if they even know what they’re talking about. And a lot of times, they don’t!”

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