Why having values may lead to better investment decisions

On a personal level, my wife and I started thinking about ethical and responsible investment shortly after our first child was born. Being responsible for someone other than ourselves really meant a review of our priorities, and the importance of a 'legacy', for want of a better term.

You got that right

On a professional level, it took a little longer to get started. As I have said in an earlier blog posting, I had a boss who thought that 'ethical investment' was for hippies (his words), and was not something that he wanted discussed again. So I let it 'sit', but still looked for opportunities to introduce it into the practise, if an opportunity arose.

This 'opportunity' really hit home one day when I was speaking to a surgeon who was distressed to find that his investment portfolio continued an exposure to Philip Morris. He said he spent a good portion of his working week operating on oesophagus's (oesophagi?!) and lungs burdened with cancer, and could not and would not make money from a company selling tobacco products.

It was at this point when I realised; this surgeon is no hippy.

Not a hippy
 

Investments play a part in your wealth creation strategy.  Taking your personally held values, and using them to inform your investment decisions can lead to more active ownership and engagement in the process of what it is your trying to achieve.

So you think you have no investments? Almost everyone of working age in Australia has SOME superannuation. If you want to meet your goals, then you'll also need to put SOME money SOME where at SOME time, to help you to achieve this. It is possible to take the things that are important to you, and incorporate them into the investment decisions that you are making.

You can be comfortable that your investment decisions meet your personally held values, and also assist you to meet your financial goals.

Now people, we have analytics. I can see that there are page views. I'd love it, if you could leave a comment or two, to get a discussion happening, or just to hear your thoughts.  

Why, why, why, why, why?

Do you have values?

Great!! Have you ever stopped to think about them and why you have them?

Values come from who we think we are.We find out values when we ask questions of ourself like:

• Whats important?
• What's right?; and
• What should I do?

Values aren't things. We can't hold them or spend them, but if you think of yourself in a certain way, how did you feel the last time you acted in a way contrary to those 'values'. The worse you felt, probably correlates to how strongly you hold those values.

So how often do your actions match your values?

The '5 whys' system was initially used by Toyota. It is very simple, and can be very effective. Next time you want to do something, ask yourself why?

Why do I want to do this?

Here is an example from when I founded Viridian.

Why do I want to do this?
I think there is a better way of doing financial planning.

Why?
People deserve to be given advice that has their interests at the centre.

Why?
While planning your finances isn't 'life and death', wrong decsions can have a huge negative impact.

Why is that important?
A few small decisions, like paying off a home loan faster, saving for a rainy day or life insurance could have had a large positive impact on my parents.

Why does this matter regarding setting up a business?
I want people to not make the same mistakes.

So for me, that's why. Everytime I hear that someone has cancer, or has had a heart attack, I feel a littel stab. When people talk about the 'conventional wisdom' of making money that, unfortunately doesn't make sense, my stomach tightens, just a bit. So this is why I founded a financial planning business.

Why not give this a try with something you are doing, (or just as good, if something has gone wrong), but rmember: the only important thing is honesty.

We want to learn more about you. More important we think YOU should know more about you.

Find a way or make one

I have been a financial planner now for about 14 years. I have been a business owner and manager for about 6 1/2 years.

I doubt that I ever thought that I would own a business when I started in planning. It really came to a head about 7 years ago, and for a number of reasons.

I was unhappy with the direction that the company I worked for was taking. I felt uncomfortable, to say the least, with the sales at all costs ethic, and what I guess I would consider a product first approach. I felt, and still do, that client needs come (waaay) before the 'product'.

Secondly, I was concerned about the compliance record. I personally did OK, but the practice had...issues. Compliance can be onerous at times, but it is in general for consumer protection, and important.

Finally, I had started to look into ethical and responsible investment. More to the point, it had started to make real sense personally, and from a business sense. Even more to the point, I was beginning to feel uncomfortable about the 'disconnect' between how I felt personally on issues, and what I was doing 'at work'. With regard to that, I don't feel that there is ANYTHING unethical or irresponsible with financial planning or investing per se (fancy, huh). But there can be unethical practices that underline this. Moreso, it is a problem if you (the invetor), aren't aware of the practices, and they are something that in general you wouldn't feel comfortable with (or worse, would actively avoid).

(Oh, OK, so you are aren't an investor? Just about any person under the age of 50 who has had a job has super. And it just might curl your lashes to see where they invest YOUR money).

It came to a head when I mentioned the idea of incorporating thses ideas into the practice. It did not go well. Hippy sh*t may have been mentioned, (as per a Brisbane Times article from a couple of years ago).

So putting the three together, I decided that the practice that I worked at was no longer for me. I couldn't see the point in working elsewhere, thinking that the lack of control would be the same everywhere.

In essence, I felt that the way forward was to go and do something else completely, or go and set out our 'own shingle'. That new business would have to have the clients interests at heart, ensure appropriate client protections were in place, and that we respected, and actively canvassed client values.

A few rushed months of rudimentary business planning later, and Viridian Wealth Management Pty Ltd was born.

Feel free to comment. I would love to hear what you think.