This faith and finance podcast is underwritten in part by Eventide Investments. They believe that investing is more than just returns. It's an opportunity to partner with companies that align with your values and are making a positive difference in the world. Learn more at eventideinvestments.com I am Rob West.
Notice how that verse doesn't say in some things. The fact is we're to honor and glorify God in all we do, including our investing. Sean Morgan joins us today with some interesting data on Christian attitudes about faith-based investing. And then we'll take your calls at 800-525-7000.
That's 800-525-7000. This is faith and finance, biblical wisdom for your financial decisions. Well, it's great to have Sean Morgan back with us again. Sean is the director of product marketing and Eventide Asset Management and underwriter of this program. And Sean, welcome back.
Glad to be back, Rob. Sean, for several years now, we've of course been watching the growth of faith-based investing as a movement. But let's talk about the brand faith-based investing. Do you feel that needs some work?
It really might need a little work. Many financial advisors hesitate to bring up the concept of values-based investing or faith-based investing with their clients. And come to find out, it's for good reason. These terms don't actually mean much to most people, even to people who consider their faith to be very important in their lives. So Eventide recently commissioned a survey of investors 30 and older who self-proclaimed that they consider their faith to be important or very important in their lives. And we received some interesting insights from this group of people. So we learned what terms investors have positive or negative responses to, what types of companies they would want to invest in, and which ones they would want to avoid. And interestingly, one question at the end of the survey gives us a lot of perspective into what investors want from a financial advisor.
Well, looking forward to hearing that. But first, tell us the types of questions you asked for the survey and perhaps some of the results. So generally speaking, when we asked toward the beginning of the survey about their opinion about investment approaches with certain labels, there were far more neutral responses than very positive or somewhat positive responses. So for example, this was one of the questions we asked, what is your opinion of the following investment approaches? More people responded with neutral to faith-based investing and impact investing. Now, the term that received the greatest amount of somewhat positive responses was values-based investing, but it was still only 35% of people said that they had a somewhat positive response and only 17% of people had a very positive response. And again, Sean, just to interrupt for a second, these were people who said their faith is really important to them, right?
That's exactly right. So you're thinking about a subset of people that you would think would have a naturally positive response to some of these terms, but what we were getting back were kind of blank stares whenever we introduced these concepts to them. So now what gave us more insight into maybe why they responded this way was another question we asked. We asked, how familiar are you with the following approaches of investing? And then we listed off things like values-based investing and most people said that they had actually never heard of it. Faith-based investing, never heard of it. Biblical responsible investing, even more people had never heard of that. And even when we mentioned like more other types of intentional investing approaches like ESG or socially responsible investing, most people still said that they had never heard of those, which kind of explains why there weren't more positive responses.
People just don't know what we mean by these terms. However, as we got further in the survey and we asked more questions like, would you sell off your investment if you learned a company was profiting from certain things that people would have a problem with? So when we asked those types of questions, many people responded by saying, well, they would want to sell off their investments if they learned the companies were doing these things.
So hypothetically, this is one of the questions we asked. So we said, hypothetically, would you seek to divest or sell off your investment if you learned that a company... The highest response was profiting off of pornography. 80% of people would want to sell off their investment if they learned that a company was doing that.
And close behind that was people not wanting to invest in companies that use suppliers with child labor or harsh labor conditions. So these were all like more specific questions that we were asking. And when we asked those more specific questions, people had more specific responses as far as how they felt about them. Interesting. Well, we'll continue to unpack the data that you gleaned from this survey just around the corner, including would people increase their investments in companies that create human flourishing? And what was that question that they were interested in at the end of the survey?
Back with Sean Morgan after this. Stick around. FaithFi is grateful for support from One Ascent. One Ascent believes that your values inspire why you invest and how they can inspire how you invest. One Ascent's goal is to provide solutions designed for every need and invest in businesses that bless the people and places God has made. They want to help investors do well by doing good to explore a new way of investing that aligns with your values.
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With me today, Sean Morgan. He's director of product marketing at Eventide Asset Management, an underwriter of this program. Before the break, Sean was sharing with us about a recent survey that he and the team at Eventide conducted about faith-based investing, talking specifically to believers, folks who said their faith was very important to them about this idea of faith-based investing. Have they heard of it?
What terms have they heard of and what actions might they take if they knew their companies either were or were not aligned with their biblical values? Sean, frame up the survey again just for a moment for those just joining us in terms of what you were trying to accomplish. Yeah, so we asked at the beginning. Number one, we just chose a subset of people that at the beginning of the survey said that their faith was very important or somewhat important to them.
So, we're already dealing with the people that say faith plays a big part in their lives. But then we wanted to know what their responses were whenever we asked them about investment approaches. And when we mentioned terms like faith-based investing and biblically responsible investing, a lot of them gave us blank stares back on the paper where they said, we just don't know what those mean when we have a neutral response to those. So, further out throughout the survey, when we started asking more specific questions that let them into what we meant by that, we actually had a lot more specific responses. Yeah, let's dive into that. You did get somewhat of a positive response to values-based investing, but more blank stares around ESG and socially responsible investing.
So, even though these are all gaining traction and we're seeing growth, the average Christian in the pews perhaps is still relatively uneducated about what's going on here. Now, before the break, Sean, you were sharing about a specific question you asked around whether someone would divest or sell off an investment if they learned a company was doing things that were misaligned with their values. Tell us more about that.
Yeah. So, if we were to just ask if a company was acting against your values, would you divest from it? We probably anticipate that we'd still get more blank stares. But when we asked specifically of would you divest from a company if they were profiting off of pornography, 80 percent of people said they would want to sell off their investment. And the same thing with companies that had suppliers with child labor or labor conditions or creating products that would end a life or even products like tobacco. 55 percent of people said that they would divest from a company if it was producing a product that was harmful to people like tobacco. Now, we also ask the inverse question of would any of the following increase your desire to invest in a company? And over 60 percent of people wanted to invest in a company that creates products or services that are healthy and positive for people and families. And the same thing with investing in a company that creates positive impact, not just for investors, but also for others like customers and employees. And this must have been really encouraging to you, Sean, and the work that you're doing there at Eventide, because what it says is even though there's an education gap, there's a real opportunity because believers, when confronted with these opportunities, want to lean into this, right?
Well, it lines up with what I experience in real life. Whenever people ask me about what I do, if I come back to them with a term of, hey, I work for an asset management company and we do faith-based investing, I see a little bit of confusion. But whenever I say, hey, you know how you're probably investing in things and you have no idea what you're invested in? Well, my company seeks to avoid investing in companies that are doing harm and it seeks to invest in companies that are actually doing something really positive. That actually resonates a lot more with people. It sure does. You know, I get that all the time on the radio as I'm trying to explain values-based or faith-based investing.
And I think an example is also helpful. You know, Sean, you educated me, you and the team at Eventide, about the fact that the solar supply chain was just fraught with slave labor. And as you all went out to invest in that particular area, you've selected companies that completely avoid that. And I think that's just something people can understand and wrap their arms around. Would you agree? That's right.
Whenever you're watching the news or reading about big injustices going on in the world, it's interesting to look at your own investing portfolio and say, in what ways am I proliferating this or in what ways am I like helping solve this problem? Yeah, that's really interesting. All right. You said that the response from the last question was the most surprising of all.
Share that with us. Yeah. So at the end of the survey, remember at the beginning of the survey, we were getting neutral responses from things like how much do you care about faith-based investing? But after the survey and after we asked more specific questions about would you be willing to divest from these types of companies, invest in these types of companies, we asked, would you be willing to change financial advisors in order to get access to investments that align with your values? And a whopping 62 percent of the respondents said yes. They would actually change advisors. We weren't just asking them, would you like it if your advisor brought it up to you?
We were asking, would you be willing to actually leave your current advisor and go find a new one that aligned with your values? Sixty two percent. Incredible. That's right. Yeah.
And another interesting question was, we also found that 63 percent of these respondents said that their advisor has never brought these things up to them. Wow. Yeah. That's fascinating. Did that surprise you, Sean? It really did on a lot of levels, because as advisors are going through in relating to their clients and their values on other aspects of their financial plans, how they want to spend and save and give, it actually exposes a big need for advisors to come in and say, we want your investments to also reflect your values in how you're investing your money, not just in how you spend, save and give, but how you invest.
Yeah, that's exactly right. All right. Sum this up for us. So as you and the team pulled back and analyzed the data, what were some of your big takeaways? So overall, this survey gives us a lot of insight into how advisors can talk to investors about faith based or values based investing.
Overall, we figured out that these terms carry a lot more weight when you describe what they mean. Don't make assumptions that people are just immediately drawn to them. But make no mistake, people care about what they are investing in and advisors can really show that they care about their clients by having these conversations with them. So I would encourage investors to bring this up with their advisors. And if you're an advisor, don't shy away from having these conversations with your clients. In fact, advisors that do bring this up with their clients might just deepen their relationship and retain more of their clients. Yeah. You know, Sean, I was talking to a caller just yesterday and she said, you know, Rob, I'm interested in this whole idea of values alignment with my investments, but I brought it up to my advisor and he's a believer.
He's very committed in our church, but he kind of dismissed it and said, yeah, you really can't do that. And I think so often advisors are well intentioned. They're certainly not trying to mislead anybody, but so many of them just aren't familiar with what's possible in this space today. Would you agree with that?
I would. There is a lack of there's a lack of education, especially with financial advisors, that when they're looking day to day on what's available right in front of them on their platform, they don't even know how to go about seeking out investment advisors or investment management companies that will implement this into how they're managing their portfolios. And we just that's a big initiative at Eventide is to fill in that education gap to show advisors that it is possible. I know there's a lot of work you all are doing there. We're certainly grateful for it.
Where can folks go to get more information and begin their own educational process? So I would go to our website, eventideinvestments.com, and you can search out our resources there and reach out. Advisors can actually reach out to us and we can take them through this process. Excellent. Sean, we always appreciate our time with you, my friend.
Thanks for stopping by. Thanks, Rob. That's Sean Morgan. He's been our guest today. He's director of product marketing at Eventide Asset Management. The website again, eventideinvestments.com.
All right. Your calls are next. The number 800-525-7000. That's 800-525-7000. I'm Rob West and this is Faith and Finance.
We'll be right back. We're grateful for support from Eventide Investments on the Faith and Finance program. Eventide's approach to values-based investing is grounded in the belief that humankind was created in the image of God with intrinsic dignity, value and worth. Eventide calls this investing that makes the world rejoice. More information is available at eventideinvestments.com.
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For licensing information, please visit nmlsconsumeraccess.org. Welcome back to Faith and Finance. I'm your host, Rob West.
The number to call is 800-525-7000. I'm looking forward to hearing from you as we take your calls and questions from across the country. In fact, let's head out to Birmingham. Hi, Lou.
Go ahead. Yeah, I'm 73. I'm still working, but I have an eight-year-old granddaughter that I'm helping to raise. OK. And I have my parents just passed and left some money, which I would like to leave as a legacy for my granddaughter for college. And I just don't know the best way to grow that money, whether it be a 529 or some other method. Yeah, if it is earmarked for college, Lou, then that's what I would do. You could go to savingforcollege.com and find out which states 529 would be recommended for you.
It could be Alabama, could be another state. They'll help you make that decision based on whether or not you get a tax break there in Alabama versus, you know, better performance in another state. And then if she didn't end up using it, she's got a couple of ways to get it out. Number one is it could be taken out on a pro rata basis for any scholarship awards or grants she receives. So if she gets a full ride to school, she can absolutely take that money out, no penalty.
Apart from that, let's just say she decided not to go to college. The money could be used for other types of advanced education. It can be used to pay for qualified kindergarten through 12th grade private school expenses up to 10,000 per student per year. She could roll it over into a Roth IRA.
There are certain requirements on that, but that's something new that's coming that's a part of the secure act 2.0 where money could be rolled over in increments each year so long as it's been in there at least 15 years into a Roth IRA. And then it could just keep growing tax free until, you know, retirement and she'd have a great start on a retirement fund. You could also change beneficiaries on it and, you know, give it to another child or grandchild to be able to use it for college. So there are some options if you didn't want those requirements, which by the way, that gives you tax advantages because the money that you put in there, this let's say 40,000 into the 529 is going to grow in the in the mutual funds inside the 529 tax free. So long as it's used for qualified education expenses. And so that's a great benefit.
But if you didn't want to be limited to use for college and one of these other options I mentioned don't sound appealing, then I'd probably just keep it in a taxable account in your name, invest it, and then you could decide when to give it to her and for what purpose. But if it truly is earmarked for college, I like the 529. Does that make sense, Lou? Yeah, it does.
Absolutely it does. But now if I wanted to invest it in my name, do you have a suggestion? Is mutual funds the way to go?
It is, yeah. For an amount like that, it would give you a good broad diversification. It's a little simpler because you're not having to pick the individual stocks. So with one purchase of a mutual fund, you know, let's say a $40,000 allocation, you're going to get hundreds of stocks. Then the question is, okay, which mutual fund? And I think you got a couple of options there. You could use a robo-advisor like the Schwab Intelligent Portfolios. You could use one of the faith-based investing mutual funds like you'll find on our website at faithfi.com or our friends at soundmindinvesting.org from Mark Biller's organization could help you as well.
So I would check out some of those options if that's the direction you decide to go. You sound like a wonderful grandmother and thank you for being on the program today, Lou. God bless you. Let's go to Illinois. Hi, Linda.
How can I help? Hi. Me and my husband, we're both retired. He has a pension and I get some income as well. I'm 69, he's 71, and we've been saving cash that's in a safe. And I've been hearing about the digital dollar and Biden's ability to remove the U.S. dollar at any time.
And I'm wondering what could we do to hedge against a loss? Yeah, you know, first of all, President Biden can't do that on his own. Coinage is a congressional function, so it would require Congress to act.
They seem to not be able to agree on just about anything. So the idea that both the president and both houses of Congress would get on board with a digital currency is a pretty far stretch. And if it ever happened, it's much further down the road. You know, President Trump was out saying he will never allow a central bank digital currency. Of course, we have no idea who will be president, but that's at least one candidate who could be in office. That is very clear on it. But even if it was Biden for another term, he doesn't have the ability to act alone. Secondly, you know, what's being discussed if it ever came to pass is that it would not replace our physical currency, the legal tender that you have.
It would only supplement it. Now, I'm not a fan because of the loss of privacy, but I don't think it's something we're going to see, you know, anytime soon. If it were to come, it's much further down the road. And there's a lot of congressional leaders who have already said we're against it.
For instance, the state of Florida has already said it doesn't comply with our uniform commercial code. So they've gotten out ahead of it as well. So I wouldn't be concerned about that. I would just be invested properly according to your age and risk tolerance with stocks, bonds and precious metals, perhaps.
And, you know, you continue to invest systematically. I think you'll do well. Thanks for your call.
Tim and Boise, we have just a couple of minutes left. Go ahead. Hey, I'm my wife and I are 65 and we're looking to retire and we are debt free. And I'm we're kind of in between as far as when do I need my life insurance?
Yeah. You know, the question, Tim, is, is there a hardship that is created by one of you passing away for the other one, namely in terms of a loss of income? Or if one of you passes away, would would the other one be just fine with the assets that you've accumulated? I think we would be just fine. You know, we got a lot of property and we're debt free and we've got some cash set aside.
So, yeah. Well, what I would dial into and all that's good. I mean, that keeps your expenses real low because you're debt free.
You've got assets. I think the key is looking at your income. And so go ahead and work on your retirement budget and say, what would we need per month for the two of us?
And what would that look like if one of us passed away? And then if you passed away, what income sources would she have? Would her Social Security, for instance, plus, you know, any other retirement income you all have that would be coming into her, that would be secure for the rest of her life, be enough to cover her and the same for you?
And I think that's the evaluation. The goal is just what you said, Tim, which is we have life insurance during our working years to offset the risk that if one of us were to pass away, it creates a real problem for the other spouse because of that loss of income. But the idea is once we get to retirement, ideally, we no longer need life insurance.
So we drop that expense because the other spouse is provided for through our assets and guaranteed income sources and entitlement benefits. So hopefully that helps you, Tim. We appreciate your call today. God bless you, sir.
Well, that does it for us today. I'm Rob West. Thanks to our amazing production team and to you for listening. I hope you'll join us again next time right here on Faith and Finance. Faith and Finance is provided by Faith Buy and listeners like you.
