A new wealth management firm is using an automated Q&A focusing on time horizon and risk tolerance to assist a new generation of digital investors with building customized portfolios that is unique to their personal values and aims for financial return and positive social impact.
Prophecy Impact’s Bet
“A movement is underway that promotes the power of private capital to make positive changes in our communities and around the world. This movement is called Sustainable, Responsible and Impact (SRI) investment, and it is gaining incredible traction,” founder and president Greg Wait of new investment firm Prophecy Impact wrote in an open letter to clients and friends.
Mr. Wait intends to combine the power of two trends he is not alone in seeing in the investment space: the rise of robo-advisors and of purpose-driven investing. An excerpt of his open letter follows:
As a father, with three millennial-aged children, I understand the appeal of online services and share their passion for environmental and social responsibility. Of course, technology has appeal across generations…a great family friend, “Grandma Ann,” who is over 90 years old was one of the first people I knew to own an Apple Watch! At Prophecy, we use available technology to bring our expertise in designing responsible and impactful investment portfolios to a wide audience.
As you proceed through our online investment process, you will be directed to a portfolio strategy that is designed to help you meet your objectives based on your investment time horizon and risk tolerance.
Prophecy’s portfolio strategies are 100% invested in funds that incorporate different variations of ESG criteria. Based on their analysis, these stock or bond funds may exclude certain companies that are deemed to be harmful to the environment or have poor human rights records.
They may exclude companies that manage their business in an unethical or non-transparent fashion. They may seek companies that have established policies to reduce their carbon emissions or toxic waste. They may invest in companies that closely monitor the human-rights records of their supply chain, or offer generous employee benefit packages to their workers. They may provide direct investments for community redevelopment in rural or blighted urban areas of the country. They may be attracted to companies that embrace diversity in their workplace and on their Board of Directors.
No company has a perfect ESG record, but as shareholders of a wide range of companies, these fund managers can engage with corporate managements to help them improve their sustainability policies…we call this “shareholder advocacy” and it is another powerful tool for change.
