Assessing the Values of Money Management Organizations
By Richard Todd
Our role is to perform due diligence on the managers, products, and strategies that our clients use. Ultimately, our extensive qualitative and quantitative approach is to determine if past performance is luck or skill and if it is repeatable in the future.
Many of our faith-based clients also care about the make-up of their portfolio to make certain that exposure to abortion, pornography, child labor, and other objectionable investments are screened out from the portfolio.
Plenty of money management firms are willing to manage a religiously screened portfolio. However, many of these firms uphold values that are misaligned with these faith-based organization clients.
In our due diligence process, we ask key questions to help us understand if the money management firms have contrary values to the Church. We ask the following questions:
Describe your culture.
Do you have a faith statement?
Describe your firm’s philosophy on charitable donations. Please share a list of organizations receiving donations.
Does your benefit plan pay for abortions and abortion transportation across state lines?
Do you have a philosophy and statement on religious freedom?
In the last five years, has your company sponsored organizations or events that may be in conflict with the Church or Christian values?
Does your organization manage money for organizations that may be in conflict with the Church or Christian values?
The answers to these questions can be quite revealing. In fact, many firms promote their “woke” practices publicly.
Most, if not all, investment consultants managing money for faith-based organizations fail to ask the questions that we have outlined. This is partly because investment consultants struggle to provide answers about their own firms that align with the values of their faith-based clients. We highly recommend that these questions be asked to all your service providers.
The world is changing. There are noted instances where service providers have “cancelled” faith-based organizations. Money management and investment consultants happily collect fees and commissions from the religious space. Perhaps it is time to look closely at the values of these firms.