Devin Taylor, Investment Strategist, Bank of America Private Bank and Merrill
Devin is an Investment Strategist within Bank of America’s Private Bank and Merrill, which is the wealth management division of Bank of America.
What do you actually do all day?
As an Investment Strategist on our Sustainable and Impact Investing Strategy team, I serve in a centralized research and impact investing specialist capacity for advisors in our Private Bank and Merrill. Our team focuses on advisor and client education, creating content relating to sustainable investing and providing guidance and tools addressing how advisors may introduce socially responsible, sustainable a/k/a ESG (environmental, social and governance) strategies into a client’s overall investment plan.
For five years I was part of the Bank’s portfolio construction group which involved selecting funds with an impact or ESG focus for a managed portfolio for clients of Merrill and Bank of America Private Bank, following our firm’s suggested asset allocation mix. As the volume of client inquiries for impact investing has increased, my role has expanded to include both investment research and facilitating communication about sustainable investing theory and practice for financial advisors during their conversations with clients.
We begin by helping clients understand what they currently own in their portfolios; each fund is evaluated by both traditional investment criteria and ESG criteria. Once we know where they currently stand, we can talk more about their goals. Some clients want to avoid exposure to certain industries such as firearms, alcohol, and tobacco, or increase exposure to companies with positive ESG characteristics such as companies that are leaders with regard to climate change solutions or gender equality and diversity among their management teams.
Recently, I’m most often supporting our advisors during the implementation stage where they’re looking for specific investments or funds that align with the clients’ goals. We subscribe to several ESG data providers such as MSCI ESG Research which helps us to evaluate an investment using various lenses such as carbon emissions intensity exposure, gender diversity, or corporate governance controversies.
A lot of work goes into vetting the funds we offer to Bank of America’s private banking clients. The due diligence process begins with a quantitative review of risk adjusted return and investment processes, philosophy, and operations of any investment strategy being considered. For ESG oriented investment managers, there is an additional layer of both quantitative and qualitative review. It’s important to note that the materiality of those data points is going to vary from company to company and especially from sector to sector. Next, our due diligence analysts interview the fund manager and, if approved, will monitor both the financial risk/return and ESG performance of a strategy.
From an industry perspective, there have been developments toward more shared frameworks relating to impact reporting across the asset manager and asset owner (investor) communities. We’re starting to see convergence in terms of what information is reported and the format it’s reported in. Two of these frameworks are the United Nations Sustainable Development Goals (UN SDGs) and the SASB standards (Sustainable Accounting Standards Board). We currently report our firm’s impact investing assets under management to the UN Principles of Responsible Investment (UN PRI) and we recently just made public commitment via lending vehicles toward a subset of the SDGs.
Another industry organization we’re a part of is the US Forum for Sustainable and Responsible Investment (US SIF). They are the most overarching group from an investment industry perspective. They put out a biannual trends report which tracks all of the assets under management and the investment activity in sustainable investments for all institutions and private foundations domiciled in the U.S. We cite them frequently in our research and they really define the size of the market and footprint of sustainable investing in the US. US SIF is one member organization within the Global Sustainable Investment Alliance (GSIA).
What are some of the key skills for success in this role?
For a role as an investment strategist or portfolio manager you need an understanding of investing, portfolio management, the asset management industry, and financial planning. With regard to investments and portfolio management, the CFA (Chartered Financial Analyst) curriculum is the most all encompassing body of knowledge, it covers concepts like modern portfolio theory, asset allocation, and particular details about investment analysis across a range of asset classes (please be aware that the CFA program is a challenging and multi-year time commitment!). Another credential that many of our financial advisors pursue that is helpful as it relates to holistic financial planning is the CFP (Certified Financial Planner) designation. In order to bring a sustainability lens to fundamental security analysis, it would also be beneficial to be familiar with the SASB (Sustainability Accounting Standards Board) industry specific financialmateriality framework. Sustainable investing professionals also need to be familiar with the UN Principles of Responsible Investment.
We’re currently building our own training program focused on sustainable investing. I think as we move forward, we’ll see an increase in the number of certifications and credentials around sustainable and impact investing. For example, SASB just came out with a certification in the Fundamentals of Sustainability Accounting (FSA) just a few years ago, and US SIF also just came out with training that people can take. The UN PRI is also doing a lot of work with the CFA society to incorporate more elements of sustainable investing into the mainstream curriculum for financial analysts.
It’s exciting to think that impact investing principles might be rolled into how we train everyone instead of it being a specialty. We’re already seeing it being integrated into the mainstream of where investors are receiving training such as MBA programs and through the CFA institute.
What is your favorite part of your job?
The sustainable investing space is still very much in rapid growth mode; it’s not completely fixed or fully defined. It’s fun to be a part of a growth pocket within a mature industry and it’s exciting to contribute to how our firm approaches the space.
What is the hardest part of your job?
We get a very high volume of requests, both because we have a lot of clients who are approaching this topic for the first time and because many clients have done their homework and are ready for help with moving their money in the right direction. While being busy is a good challenge to have because it means our part of the Bank’s business is growing, if we can’t meet unique client needs in a timely and cost effective manner then they may move their assets to a competing institution because they have many choices of financial services providers in a highly competitive industry that is being reshaped by new technologies and innovation. We have a great team that’s very dedicated to our clients from our central research teams within the Chief Investment Office to our Advisors who are extremely dedicated to their individual clients, but it’s also why we’re so focused on capacity building in order to evolve along with clients goals and needs for their investments. Overall, sustainable and impact investing is still a small part of our overall wealth management business in terms of dollars invested (roughly $18Bn of a firm total of $2.1Tn) but it’s growing very rapidly, which makes it exciting.
The other challenging and exciting aspect of impact investing is that it’s a topic that cuts across all asset classes and multiple lines of business for us at the Bank. For example, I work within wealth management with advisors who work primarily with individual clients and families, but we’re also seeing interest from institutional clients of the investment bank, demand for newer security types like the social impact or green bonds from our capital markets area, research incorporating ESG factors in to sell-side equity research, opportunities for impact through community development finance lending, and direct investment programs through our corporate ESG team.
What is your proudest professional achievement?
I’m very proud to have navigated through a career in the financial services industry into a role where I’m directly contributing to the growth of the impact investing community. At the beginning of my career I had planned on developing finance and accounting skills and later taking those skills to a mission driven company. Fortunately, my current role allows me to stay within the financial industry while still working with clients and institutions who have a mission beyond just financial return. It’s really rewarding.
What are the game changers in your world?
Across the broader industry I think it would be helpful for more people to realize that sustainability isn’t really a separate set of ideas, it’s something that should be integrated into the investment process to help explain forecasted risk and return. I think many investors are coming to that realization. You’re starting to see more reports dropping the term “climate risk” and just referring to it as “risk.” I think that’s a positive direction.
What was your path to this role?
My undergraduate degree was in geography with a minor in economics at Colgate University which included work on sustainable development and global economic trends. That took me to a job with a commercial bank focused first on underwriting commercial and small business loans and then I transitioned into the wealth management division. From there I moved to a client facing team for several years within U.S. Trust. I enjoyed working directly with individuals and families to plan for managing their wealth during current and future generations. The personal nature and trust involved in looking after other people’s money is a responsibility I find rewarding. Just before joining Bank of America, I also became more involved in the impact investing community as a volunteer. I became the chairman of a young professionals’ volunteer group in New York called Accion which gave me hands on experience in microfinance or small business lending. It was great to build my professional experience in traditional banking, wealth management and investments while getting tangible impact experience as a volunteer. I also got some experience while in business school at NYU Stern as part of a class that took me to Colombia to work with a nonprofit social enterprise in Medellin. My hands-on experiences with Accion and Stern gave me credibility and context as I was building my network in impacting investing.
What’s your advice to someone interested in a role like this?
I mentioned some of the skills and training you’d need for a career in this space earlier. What I’d encourage others to do is really focus on building that core experience in investments or banking while developing sustainability knowledge in parallel and finding ways to apply those concepts to one another within the context of any number of job functions.
What are your favorite resources?
The NYU Center for Sustainable Business maintains a very active alumni group and hosts some really wonderful events. Most academic institutions have some sort of sustainability focused center or group. I also recently reconnected with NYU’s Net Impact chapter which is a great resource for students and young professionals.
On the portfolio management side, SASBhas a very helpful annual symposium.
Morningstar has a Sustainable Funds Landscape Report that’s very helpful.
Impact Alpha puts out a great podcast and newsletter as well as great events. Impact on Record is another great podcast.
The US Forum for Sustainable and Responsible Investment (US SIF) has a great Fundamentals of Sustainable and Impact Investment online course.
I enjoyed Cary Krosinsky’s book Sustainable Investing: Revolutions in Theory and Practice
Who is your sustainability hero?
Jackie VanderBrug, the leader of our Sustainable and Impact Investing Strategy group at Bank of America’s Private Bank and Merrill. I first saw her present in 2012 and was just blown away by her ability to communicate the idea of impact investing with passion and possibility. She’s had a varied career working in public policy, with a successful technology start-up through its IPO and then for an activist think tank where she pioneered “Gender Lens Investing.” I spent several years finding projects to work on with her after she joined this organization to build out the Impact Investing program from the ground-up. I’m thrilled to say I work directly with her now in shaping the Bank’s approach to impact investing research and implementation. Her likely message to a reader of this interview would be that we need more people being catalysts for positive social or environmental impact across numerous disciplines (finance, non-profit, public sector). I would suggest extending that idea by saying that if you are so inclined to apply a sustainability or values-based lens to your investments you can use the financial markets to affect positive incremental social or environmental change, and if done as part of a holistic investment plan, maintain progress toward your financial goals as well.
