Invest With Your Heart

Invest With Your Heart

Socially Responsible Investing (SRI) is becoming more popular as today's investors demand the same choices in their portfolios as they have in other aspects of their life.  Just as they can decide whether or not to buy "green" automobiles and mattresses, "Eco-friendly" stemware and clothing, or "certified organic" produce, investors now have a bigger say in how their assets are actually invested. But SRI has spread beyond investing in ways  that are good for our planet. People can now make choices based on religious beliefs or other social criteria.

The Social Investment Forum, a national nonprofit organization promoting SRI, recently confirmed investor demand for more accountability in how their money is invested. From 2005 to 2007, SRI assets increased more than 18% while all investment assets increased less than 3%.

One way to invest with your heart is through the use of a separately managed account (SMA). Separate account managers buy securities and develop a portfolio based your particular criteria such as time horizon, tolerance for volatility and risk, and other factors. A SMA could invest in large or small company stocks, international stocks, various types of bonds, and other investments in order to generate income, growth or a combination of the two.

Separately Managed Accounts offer two distinct advantages to investors. First, separate account managers buy securities on your behalf.  Since you own the securities outright,  you will have more control over the tax liability within your portfolio than you would in other types of investments. Also, you can customize the portfolio by excluding specific stocks or applying social screens that go beyond "traditional" ones like alcohol, tobacco and firearms. Additional exclusions could include:

  • Adult entertainment
  • Animal welfare
  • Board diversity
  • Contraceptives/Abortifacients
  • Environmental performance
  • Gambling 
  • Human rights
  • Labor relations/Workplace issues
  • Nuclear power
  • Stem cell research
  • Weapons/Military

Traditionally, only the extremely wealthy could invest in a SMA as account minimums put this type of customized portfolio out of the reach of most investors. That is no longer the case. Minimums are generally lower than $100,000 and in some cases as low as $25,000. 

Many investors have never been asked if they would apply social exclusions to their portfolios, and many more don't realize they actually have that option. Yet, our experience indicates that most investors like the idea of owning companies that share their values. If you are one of those investors, we can help you create a portfolio that meets your investment needs while allowing you to invest with your heart. Please contact us if you would like more information on how to do both.