There’s someone I’d like you to meet — a woman who’s been pivotal in shaping Ellevest at every stage of our operation. It took me a year during Ellevest’s infancy to find Dr. Sylvia Kwan, our Chief Investment Officer, and believe me when I say I’m grateful I waited. She has a PhD in engineering economic systems (from *ahem* Stanford). That’s on top of a BS from Brown in computer science and applied math. She also holds the Chartered Financial Analyst® designation and is a Chartered Alternative Investment Analyst who held positions at Charles Schwab and Financial Engines. The investment processes she’s built here at Ellevest were named #1 in retirement planning and ESG investing by Nerdwallet.*
TL;DR — she’s really, really smart.
But beyond all her impressive accomplishments, what really sets her apart is her undeterred passion for helping our clients invest for measurable impact. It’s a passion that’s not replicated at the big firms.
So this month, I asked for her thoughts on what women should be thinking about when it comes to their wealth, and to explain how our Private Wealth Management investment strategy works. I think you’ll see why I’m so grateful she’s been with Ellevest since the beginning.
First, Sylvia, tell us about your background in the financial services industry.
I’ve worked in financial services my entire career, since the mid-’80s. (You can do the math, because women are good at math, despite the myth that says we’re not!) My experience spans a wide spectrum — from working with Fortune 500 institutions and high net worth families, to people investing their first dollar.
With a degree in computer science, I didn’t intend to go into financial services. But after graduation, I joined a private bank and did six different three-month rotations in different areas, from IT (where I thought I’d end up) to HR. My last stint was in investment management, and that’s where I found my home.
I started out managing bonds for large pension funds (not too many of those left today) and eventually moved on to managing equities and portfolios for individuals. In the late ’90s, I joined my first start-up in fintech — and I fell in love with the start-up culture and energy. There’s a real opportunity to create innovative solutions to meet client needs and investment preferences.
You have a lot of experience in the wealth management and investments space. What have you learned when it comes to women and the financial industry?
Women want money as much as men do, but have different goals and intentions (and priorities and preferences) when it comes to investing and spending. Women save and invest to achieve financial goals; care more about how and with whom their money is invested; and when women have money, more of it goes back to their families and communities.
I’ve found that some women also tend to underestimate their abilities and level of knowledge when it comes to making financial decisions. Our industry tends to make investing seem complex. And that sometimes leads women to either delegate financial responsibility or procrastinate until they feel like they know more about it. But while some investment approaches are complex, the most straightforward and simple strategies have historically led to long-term success.
When it comes to investing and financial planning, what should women be thinking about?
First, be involved. Even if you delegate the details of investing and planning to your partner or an advisor, know the big picture of what you own, why you own it, what the plan is, and how much you’re paying.
Second, if you’re expecting some kind of life event, like getting ready to retire, getting divorced, inheriting money, selling a business, or having an IPO on the horizon, seek expert advice. Don’t wait until you’re in the middle of the transition or after it happens. We’ve seen too many instances in which significant amounts of money were lost or left on the table due to poor timing or planning.
How does the Ellevest Private Wealth Management investment philosophy fit into our recommendations for what women should be doing with their money?
As a fiduciary, our investment philosophy is focused on three things: mitigating investment risk through diversification, keeping fees low, and minimizing taxes through tax-efficient investments and smart planning. These are things we can control. We don’t spend time and energy on things we can’t control or predict, like stock picking, forecasting interest rates and inflation, or timing the market. No one (and I mean no one) can do this successfully.
We work to manage risk by diversifying across not only stocks and bonds, but alternatives as well, to help your investment portfolio weather the market’s ups and downs. We also believe — based on the research — that focusing on companies with good governance, and those that operate with higher environmental and social standards can help reduce risk and enhance returns.
And with the potential of higher taxes on the horizon, smart tax planning — like using a donor-advised fund, timing the exercise of certain stock options, and using tax-advantaged accounts and strategies — can make a significant difference to the tune of hundreds of thousands of dollars, sometimes even millions.
What do you think is the biggest opportunity for financially successful women right now? And the biggest question mark?
For women who want to invest for positive change, I’ve seen a big increase in investment opportunities that tackle social and environmental challenges, like housing poverty, climate change, gender diversity, and racial equality. These investments can help level the playing field for underrepresented populations and underserved communities.
What’s really exciting is that investing for impact doesn’t automatically mean sacrificing financial returns. All of the criteria we use to evaluate any investment still apply. We seek experienced managers with strong track records of execution and performance, and in many cases, with missions that align with ours at Ellevest and with those of our clients.
For me, investing for both financial and positive impact is a true win-win.