Word from Annie

What is the purpose of wealth?
Can we “do good and do well” at the same time?

It all started with a single question, one that had been lurking in my mind for quite a while: What is wealth for?

For over a decade, I was part of a sibling team building up a small family office to manage the wealth created by our parents. Prior to that, I worked as a tax attorney, helping individuals and families create trust and corporate structures to protect their businesses and wealth from the long arm of the tax authorities. So I was familiar with the standard admonitions from wealth advisors and consultants: “Preserve the wealth.” “Grow it.” “Pass it on to future generations.”

For a long time, I didn’t question these objectives, self-evident as I thought they were — that’s just what families do (at least the ones lucky enough to have acquired wealth in the first place).

Indeed, when my father asked me to join the family office (after I decided to leave my law firm job to spend more time with my children), I was quite happy to have the opportunity to help my own family achieve just those objectives.

So far, so good.

But over time, I began to question the value of what I was doing. What is the purpose of wealth? Why are we so consumed with preserving wealth, when there is more than enough to meet our needs? When there are still billions in the world who have close to nothing? And when our planet is faced with an existential crisis due to human activity?

At first I thought that philanthropy would be the answer — simply giving away the excess to those in need or towards a good cause. I had never found investing interesting anyway, and philanthropy seemed a more worthwhile and rewarding way to spend my time. It would certainly help assuage the guilt of having so much.
But then the financial crisis of 2008 happened, and it changed the course of my life. Seeing the destruction and chaos caused by a combination of human greed, ineffective regulation and the pursuit of profit above all else, I was driven to ask: what is the purpose of investing? Is it possible to invest in a way that aligns with one’s values? How can we ensure that our capital is deployed in a way that does not damage our planet or people, but actually contributes to their well-being? Can we “do good and do well” at the same time?

As I searched for answers, I realized that there was a whole other dimension to investing that I had not been aware of. All of a sudden, investing became a lot more interesting and meaningful to me, because it was no longer simply about making more money, but a way to manage capital with purpose.

Along the way, I encountered others who shared values similar to mine and were interested in exploring the same questions, and thus RS Group was born.

To this day, I still grapple with the questions concerning the value of money and the purpose of wealth. If anything, these questions have become more urgent and relevant to wealth owners as the gap between the haves and the have-nots keeps getting bigger. I don’t have all the answers but I do believe that:

1) There is not enough philanthropic capital in the world to solve the world’s gravest problems.

2) The traditional practice of investing solely for financial gain and putting some of the profits towards “good” causes is no longer sufficient or appropriate to deliver a net positive outcome. Investing in the wrong companies will add to the world’s problems, which are huge and pressing, while governments are limited in their effectiveness and mandate.

3) In order to create change at scale, we need to harness the power of the capital markets and we need to do this fast! We need to create a “systems change” so that some of the most powerful change engines the world has known — market forces and the capitalistic impulse — are harnessed to create good.
I believe we can all play a part in delivering positive change in the world. But we must first change how we think about and manage our capital. We must stop focusing solely on financial returns and start investing through a “values-based lens.”

This report presents RS Group’s journey as we have sought to put these ideas and thinking into practice. It has been a powerful journey for us and we would like to sincerely thank the various partners who have gone along on this journey with us.

We hope that by sharing our story, we can inspire and empower others to embrace positive change through their own actions.

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Annie Chen
May 2016