June 20, 2014
Early in our business when clients would ask about investing in a way that is kind to the environment, or avoids companies that build weapons or treats their employees unfairly, our simple and stock response was that these types of investments generally under-perform the broader market. And that would be the end of the conversation. How this whole issue of Sustainable and Responsible Investing (SRI) dropped off the radar of this writer, a financial planner who strives to live in a way that is gentle to our planet and to the animals and people who populate it is a mystery. Perhaps I was pre-occupied with running a business; perhaps I subconsciously continued to dismiss SRI as a viable option to help clients meet their goals. But it hit me in the face when recently I presented a portfolio design to a new client who looked aghast at the underlying companies within the mutual funds being recommended – chemical companies, frackers, weapons suppliers, agribusiness, tobacco , etc. – and declared they couldn’t’ possibly support these types of investments regardless of return. Zing!
The Forum for Sustainable and Responsible Investment (USSIF) defines SRI as “an investment discipline that considers environmental, social and corporate governance (ESG) criteria to generate long-term competitive financial returns and positive societal impact.” “Green investing,” “ethical investing,” “community investing,” “impact investing,” “mission-related investing” and “values-based investing,” are some of the labels that reflect the goals an investor may be motivated by when it comes to SRI.
There are 3 main ways to approach SRI: Investing in companies that reflect one’s values, Community Investing, which supports communities either locally or abroad who are underserved by traditional financial lenders and provides low-interest loans to improve the health, education and well being of its residents, and Shareholder Advocacy which is to pressure corporations to adopt practices and policies that have a positive environmental or societal impact. USSIF further reports that SRI investing grew 22% between 2010 and 2012 and represents $1 of every $9 under professional management. In 1995 there were only 55 mutual funds devoted to SRI; as of 2011 there were 333. That’s where we come in. In educating ourselves in SRI as advisors and sharing this knowledge with clients, we have an opportunity to truly make an impact. In April we hosted a small conference and invited representatives from Pax, Green Century and Trillium – SRI firms – and Seacoast Community Loan Fund, Coastal Enterprise, and Maine Community Foundation. Together, we can make a difference in the world. Stay tuned!
Business undecided was my major in the fall of 2005 as a freshman at Roger Williams University (RWU). As I progressed through my required ‘core’ classes it seemed my major changed with each new area of focus: Business Management, Marketing and even Accounting. Fortuitously for me, the last of my core classes was Finance. It was a history lesson about the Great Depression and all the regulations that resulted from that historic event. I was hooked and changed my major for the final time: Financial Services.
While a student at RWU, I worked as a teller at the Savings Bank of Maine. Upon graduating with a Bachelor of Science in Financial Services from RWU, I was employed as an Assistant Portfolio Manager at SMI Management & Research and later as a Client Service Associate at UBS Private Wealth Management. Financial Services has a broad spectrum of professional specialties. I had many professional tracks I could follow including Banker, Broker, or Investment Manager, but the one career path that stood out to me was Financial Planning. Undoubtedly a Type A personality, planning and organizing are a passion.
Business undecided was my major in the fall of 2005 as a freshman at Roger Williams University (RWU). As I progressed through my required ‘core’ classes it seemed my major changed with each new area of focus: Business Management, Marketing and even Accounting. Fortuitously for me, the last of my core classes was Finance. It was a history lesson about the Great Depression and all the regulations that resulted from that historic event. I was hooked and changed my major for the final time: Financial Services.
While a student at RWU, I worked as a teller at the Savings Bank of Maine. Upon graduating with a Bachelor of Science in Financial Services from RWU, I was employed as an Assistant Portfolio Manager at SMI Management & Re¬search and later as a Client Service Associate at UBS Private Wealth Management. Financial Services has a broad spectrum of professional specialties. I had many professional tracks I could follow including Banker, Broker, or Investment Manager, but the one career path that stood out to me was Financial Planning. Undoubtedly a Type A personality, planning and organizing are a passion.
However, being a successful Financial Planner involves more than setting out a technical plan of various investment instruments, but rather a dynamic plan developed through establishing personal relationships. These relationships are based on earned trust and understanding of clients’ desired lifetime aspirations, and then setting financial goals and objectives to assist clients in achieving them.
Four years ago I met with Susan for the first time, and she advised that financial planning was a great path to follow, and if I really wanted to excel, my first step was to become a CERTIFIED FINANCIAL PLANNERTM. I put it high on my list of goals and became certified in May 2013.
After living in downtown Boston for 4 years and taking the Amtrak home to Jefferson, Maine every weekend during the summer to go sailing with my family and even in the winter for ski trips, I decided it was time to make the move back to Maine. The missing piece was the opportunity for professional growth as a financial planner. That missing piece was provided with the opportunity to work as a financial planner for Cornerstone Financial Planning. Now for me, Maine had it all. I would no longer be a weekend visitor but will now be staying for a lifetime. ~ Mackenzie Arsenault
A recent study by Experian Consumer Services indicates that credit scores are important when choosing a mate for half of married adults. 95% of participants rated “financial responsibility” more important than “career ambition” or “physical attractiveness.”
The survey shows that, when asked about the importance of sharing similar goals, financial compatibility ranked higher than sex or religion. The full list of goals includes: Family goals 98%; Life goals 97%; Finances 96%; Sex and intimacy 95%; Career goals 77%; Religion and spirituality 69%; Politics 44%.
Couples today are more aware of the fact that when they marry, they are in some ways acquiring the credit worthiness of their new spouse. If one spouse has a poor credit history it can affect the couple’s ability to secure a mortgage or car loan. If one spouse brings high debt into the marriage, both spouses may feel the burden of paying it off. Having a conversation before getting married and knowing what the credit situation will be after saying “I do” is important for the marriage to start off on the right foot.
Not only is good credit an attractive feature, 73% of women and 60% of men said that having a partner who is willing to communicate openly about personal finances and credit makes that person more attractive. Wives placed a greater value on being communicative and open about finances than husbands. However while couples discuss many aspects of finances including spending habits and debt, only 43% say they have talked about their cred¬it scores after marriage and 14% say they have never discussed their credit score with their spouse.
This is not surprising because many people don’t know what their credit score is. Obtaining your credit score takes some effort. The 3 major credit reporting bureaus, Experian, TransUnion and Equifax, will provide your credit history for free but you must pay to obtain a credit score. (You may be able to get your score without paying if you apply for a loan, as the lender will pull the score for the application.) It is inexpensive - about $10 $20 - and the information is valuable. Why not sit down with your spouse or significant other tonight, open a bot¬tle of wine and visit www.annualcreditreport.com? It might be the most interesting date you’ve had in a while!
