Inquire, Measure, and Monitor: Values-Based Investing is No Longer Qualitative

The markets and the financial services industry are fluid and fast paced, more so today than ever. There are new solutions, strategies and investment vehicles that are constantly created to assist clients with their goals and objectives. But what has not wavered over the decades with regard to client and advisor relationships is trust and transparency. As advisors, clients trust and expect us to put their needs first, and to be transparent about our decision making. But recently, over the past five years, this trust and transparency has risen to a new level; where investors are urging and demanding companies to open their doors and talk about their operating practices and decision making. In order to incite change, investors are adding a level of social responsibility, therefore making companies review, adapt and implement better practices to build a better world. One may ask why this movement has taken so long to occur, citing that to spark change they must give up returns. However, now with technology and information at investors’ fingertips 24/7, new strategies allow values-based investing to change the world while also being profitable.


More and more people want to invest to their values and make a difference with their capital. Investing in Socially Responsible, Impact, or ESG investments has grown substantially over the last few years. What is imperative to remember is that values-based investing begins and ends at the client level. With the values-based investing universe being so broad, it is important to have open and honest conversations with clients to hear their values. It is not the advisor’s or money manager(s)’ responsibility to tell clients how to be socially responsible, but rather to listen and ensure they have access to solutions and technology to allow them to build a customized portfolio that is in line with clients’ values and not sacrifice return.

According to Morningstar, in Q1 2020, sustainable funds saw an inflow of $45 billion compared to an outflow of traditional investments of $384 billion. This trend continues to push in a positive direction and the next generations will challenge companies to rise to the occasion even more so in the future. With more people examining the possibilities that their capital can effect change; the innovation and solutions have become more compelling. This increase in demand is pushing technology to play a more critical role in portfolio construction. Clients want to know what companies they own and want to know how their investments are making an impact.

Beacon Pointe has access to world-class technology that creates customized portfolios to match an individual’s values and sustainability goals. Coupled with top-shelf managers, this intersection of skillful investing and great technology allows us to truly invest to our clients’ values. Clients invested in a traditional portfolio can now do a health check of their current investments and see exactly what companies they own and how they are (or are not) in line with their values. If it is climate change, animal rights, sustainable agriculture or any other focus a client wishes to establish, we can determine what companies are in violation (or in support of) and create a portfolio that meets the client’s desires.


Once a portfolio is designed and implemented clients often ask, “This is great, but how do I know if I am making an impact and what changes am I making?” Having dependable and reportable metrics has always been an aspiration of investors in the values-based investing space. Technology has developed to a point that portfolios can be analyzed as to how many cars they have removed from the road or gallons of water they have saved. These developments are substantial because now a client can have their investments work on effecting change and understand the quantitative difference – or in other words, impact – they are making.


Even when a client has transitioned into a socially responsible portfolio, our job as an advisor is not complete. As noted earlier, the financial services industry is ever changing. We continue to health check even our values-based portfolios, reviewing the underlying companies and monitoring their commitments to implementing change. The technology used draws information from multiple databases to review progress and to ensure accountability. As stewards of our clients’ capital, it is our job to continue to have open conversations with our clients, listen to their goals, risk and values, and to be transparent. When evaluating companies and/or investment managers, we always must act as an extension of our clients – that is the Beacon Pointe commitment. As we continue to do so, we can take a pragmatic and profitable approach to being advocates of values-based investing, and together make a difference not only today, but for the future.

Learn More about Values-Based Investing by downloading our Guide.

VBI Guide

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Important Disclosure: This content is for informational purposes only. Opinions expressed herein are subject to change without notice. Beacon Pointe has exercised all reasonable professional care in preparing this information. Some information may have been obtained from third-party sources we believe to be reliable; however, Beacon Pointe has not independently verified, or attested to, the accuracy or authenticity of the information. Nothing contained herein should be construed or relied upon as investment, legal or tax advice. Only private legal counsel may recommend the application of this general information to any particular situation or prepare an instrument chosen to implement the design discussed herein. An investor should consult with their financial professional before making any investment decisions.

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