Grow your business with values-based investing

By Donald F. White

The ability to articulate your values is a struggle for many people. It is not that they are without values, but being able to convey what is important to them can be difficult.

Nevertheless, everyone has certain beliefs that are a part of the fiber of their being. As Tevye in the Fiddler on the Roof famously said, there are some things where “there is no other hand.” In my experience, clients universally prefer to invest in accord with their core beliefs, especially when it does not sacrifice returns.

Values-based investing empowers investors to not only grow their portfolios, but also own shares in companies that meet critical environmental, social, and governance criteria. As a financial advisor, you can help clients understand that adhering to their values and growing their portfolio need not be mutually exclusive. Indeed, when you help clients align their investments and their beliefs you deepen client relationships, foster a sense of purpose, and ultimately grow their portfolios and your business responsibly.

Understanding values-based and socially responsible investing

When investments are values-based, they typically align with someone’s personal ethics, principles, and beliefs, including their religious beliefs. As such, many of our clients participate in what is commonly called Biblically Responsible Investing (BRI). BRI funds invest in accordance with Judeo-Christian values and at its core, BRI funds select investments based on criteria that align with Judeo-Christian values and beliefs.

Another values-based investing is known as Socially Responsible Investing (SRI). SRI funds, such as sustainability or education funds, apply a selection process that involves investing in shares of companies contributing to positive social or environmental impact. However, the critical challenge for the advisor is to find the proper values-based investments when the client may struggle to articulate their values.

Uncovering client values

Notwithstanding, understanding your client’s values is a key aspect of building rapport. When you take the time to uncover what is important to someone you are fostering a safe and comfortable environment for client interaction. Asking questions that are easy for the client to answer, questions designed to open the conversation, will deepen your understanding of the client’s values and goals, thus promoting trust.

Assuming a client desires to invest in accord with their values, it is a seamless transition to offer investment options that align with their values. For example, if the client is passionate about sustainability or religion, proposing an SRI or BRI strategy that aligns with their core beliefs makes sense. Determining investments based on a client’s innate values also gives you the upper hand over your competition and opens the door for clients to feel excited about you managing their portfolio.

Why values-based investing is important

Values-based investments encourage clients to put their money where their morals are. In a world where environmental, social, and governance issues are increasingly prominent, many investors are seeking opportunities to make a positive impact with their dollars. ETFs tied to a specific screening and selection measures give investors exposure to a diversified portfolio of companies that can align with their values.

In our firm utilizing value-based investing has led to numerous strong client relationships with impressive portfolios. We often are referred to like-minded organizations and/or families by our current clients. Everyone knows referrals are the strongest tool to build your business and birds of a feather flock together. As clients engage with our organization and see we put their needs first, they begin to trust us, and soon they encourage the people in their lives to do the same.

Clients enjoy working with people that take the time to understand what is important to them and are willing to find ways to reflect their values in their portfolio. Being a financial advisor is often more about understanding the human element of the business than it is understanding the innerworkings of financial products.

Nevertheless, when you combine client care with strong financial knowledge you are creating a recipe for great success, both for the client as well as the advisor.

About the Author
Donald F. White is the founder of Treasure Coast Financial in Stuart, FL. He was succeeded as CEO in 2020 and is now a consultant, author, and speaker. In 2021, his award-winning book, “Always End with the Beginning in Mind: How Firms remain great after the founder exits” was published and released by MFS Publishing in Seattle. For 25 years, Don’s daily radio broadcast, God’s Money, was heard on South Florida radio and worldwide over the Internet. He is an Excalibur Knight of the Million Dollar Round Table (MDRT) Foundation, a perennial MDRT qualifier dating back to 1986, and consistent Top of the Table qualifier for over 30 years. He can be reached at www.donaldfwhite.com.