Blog : Making Sure Your Investments Match Your Values

By Katelyn | Sep 21, 2015 | in

By Anne Twombly

As we all know, busy mom’s do everything, including keeping a pulse on household finances and retirement savings. There is a growing interest in the consumer community around the social responsibility of investment portfolios, in particular, the company selections that comprise various mutual funds. Individuals want to be sure their family’s nest egg is not unwittingly investing money into companies whose products and services diverge from their own personal values.

Enter the concept of impact investing, investments made into companies with the intention to generate a measurable, beneficial social or environmental impact along with an overall financial return. There are now ways for your investments to follow family values and still be financially competitive, following a strategy that seeks to maximize both financial return and social good.

According to the most recent trends report by The Forum on Sustainable and Responsible Investment (US SIF), the total U.S. assets under management using SRI strategies dramatically increased by 76 percent from 2012 to 2014. Overall, those SRI-strategy assets rose from $3.74 trillion at the beginning of 2012 to $6.57 trillion at the start of 2014.

The explosive growth of socially and responsibly targeted investing does not surprise Mike Smith, the Newmarket, New Hampshire based representative for the Progressive Asset Management Group (PAM Group), the first independent brokerage firm to specialize in socially responsible investing. The PAM Group is committed to serving as a socially responsible business, offering diverse investment options all with some aspect of social or environmental concern.

“Public awareness about the connection between investments and personal values has never been higher,” says Smith.
Sarah Brown, business owner and mother of three, recently worked with Smith to assess and explore the mix of companies that make up her portfolio, and was surprised to learn that she was funding companies that did not align with her belief system.

“Mike went through my investment portfolio and realized that within my mutual funds I was investing in a lot of fossil fuel companies, as well as many other companies which I didn’t want to be involved,” says Brown.

Brown is the Director of a community-centered union of sustainable businesses located in Portsmouth called the Green Alliance.

“I’m passionate about sustainability and I recognize that my commitment to that goes beyond daily purchases and how I treat others,” Brown continued. “Having a qualified finance person like Mike review my portfolio gave me peace of mind my money was meeting my values.”

And it’s not just for one’s weary conscience. “There’s a misconception that investors have to sacrifice financial return when investing in their values, but that simply isn’t true,” says Smith, “We believe your investments can follow your values and still be competitive when it comes to performance.”

Quoting the overwhelming research and data, Smith cited an increase in large money managers and institutional investors who have taken up larger SRI holdings. Many money managers are offering fossil fuel-free portfolios as more investors are demanding divestment from companies which contribute to climate change.

“What most people don’t realize is a lot of the large cap funds they hold, either in individual or retirement accounts and 401(k)’s, include the major oil and coal companies,” says Smith. “If you believe climate change is real, and you believe it’s wrong to profit from it, then you probably need to make some changes to your portfolio.”

In addition to identifying potentially ethically compromising investments, Smith’s firm also facilitates the restructuring of client’s portfolios to accurately reflect their true values.

“All of our clients come to us with a different perspective and history,” Smith says. “By choosing individual companies you believe in and “voting’ with your investment dollar, consumers are able to show support (or lack thereof) for the companies which comprise their portfolio.”

To begin the process of vetting your own investments start with reading the report.

To learn more about Progressive Asset Management Group and ethical investing, click here.