Aligning a Portfolio with a client’s beliefs
A client wanted to adjust her investments to be consistent with her values.
Although requiring a diversified portfolio, the client wanted to avoid investing in companies that harm the environment, have poor labor relations, or are involved in mistreatment of animals.
Determine what issues matter to the client and how each company ranks based on the client’s values.
Determine what benchmark to use and create a portfolio that is optimized to that benchmark.
Advisor Partners worked with the advisor and client to define her values using a comprehensive survey. The survey helped to rank stocks in accordance with the client’s social criteria. From the rankings, Advisor Partners created a diversified portfolio optimized to the client’s chosen benchmark but aligned with the client’s values.
The advisor incorporated client values in the management of the portfolio while including the client in the process.
Measuring the resulting “socially aware” portfolio against a standard benchmark helps the client to understand the financial impact of incorporating social values into her investment plan.