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More than 30 years on Wall Street have proven to me that many advisors could do more business – and do more good for our clients, profession and the world – if we considered the moral views of investors, whether we agree with those views or not.
Around 1980, an affluent Jewish widow rejected my recommendation that she invest in a triple A-rated bond that would pay 14% tax-free. Her objection was that it would finance a power plant that might not be safe for those living around it. She helped me understand that despite the financial benefit the bond might offer, Moses had climbed Mt. Sinai to see things from a higher perspective, as opposed to those in the valley who were pre-occupied with their own lives.
At the time, I was president of my church. I had attended church during my youth. Yet I had never been encouraged to think about connecting my faith and investments. Still, the client's ethic intrigued me, particularly when the power plant became troubled. When reviewing the Jewish scriptures, I discovered just how seriously Moses took the concept we call social responsibility. He actually made it a capital offense to habitually ignore how one's wealth affects others (see Exodus 21:28). He also said the affluent have responsibilities to protect the environment, to provide affordable credit and to avoid speculation in real estate. There were few ancient asset classes to which he didn't apply his ethic of concern.
I contemplated seminary to study such matters. Ethical issues surrounded junk bonds and junk certificates of deposit during the late 1980s. I discovered the seminaries of my major denomination no longer taught anything about the ethics of personal finance or political economy, even though those were favorite topics of the prophets who followed Moses. This lack of training, along with the fact that clergy rarely earn enough to have substantial personal investments, was a major reason the only thing I heard about money in church was that I should donate to my church. So rather than attend seminary, I wrote a book about investing with a religious ethic for my denomination. The magazine Christianity Today called it the first modern book on the subject.
I also became an independent planner and founded The Financial Seminary to build bridges between the financial and moral communities. I've since learned that while many investors have moral concerns, few mention them to advisors, and most advisors don't ask. We should. Only a month ago, the head of a Christian family foundation rejected my recommendation to invest in a healthcare real estate investment trust (REIT). It promised much-needed income and potential capital gains for the foundation. It was only upon going deeper that she said she was concerned abortions might be performed in the facilities. Her concern made my job a little more difficult, but I quickly found another REIT for her. I had to admire the way she lived her beliefs. She respected my understanding.
