When families think about their investments, they often focus on financial returns alone. But for many families today, that isn’t enough. They want their wealth to reflect their values, to become a force for good in the world. Not just a way to grow capital. Recently, we thought about a family in this situation, and the process we designed for them might resonate with you.
Understanding Your Values First
The very first step was to get to know the family. What do they believe in? What do they want to achieve with their wealth? And just as importantly, how do they want to operate as a family when making financial decisions? Only once these values were clear could we build an investment strategy that aligned with their purpose.
From Real Estate to Diversification
Think about a family with traditional real estate investments. They have no experience with impact investing and so would like to find professional guidance. Plus, the next generation wants to live their values. They have capital and so want to gain experience investing in a diversified portfolio including impact investments.
Why Traditional Wealth Management Fails
On paper, this should have been straightforward. A wealth management firm should manage their portfolio. But, here’s where the family runs into challenges. Most advisors run efficient practices built around model portfolios. If you don’t fit their template, there’s no fit. When the family explains their values and goals (including impact investments), none of the advisors they meet with can translate their goals into clear recommendations in a language they understand.
And when it comes to “impact investing”, (investments designed to achieve both financial returns and social or environmental impact) advisors simply get stuck. Licensed investment advisors must prioritize only the client’s economic best interests, so impact investments mostly fall outside their scope. There are a few specialist firms in Canada, but the big bank owned brokerages are not a source of impact investing strength.
Building a Family Charter
This is where thoughtful planning steps in. The first step for us is to draft a short, clear family charter. Think of it as a simplified investment policy statement: it documents the family’s values, governance structure, asset class definitions, and how investments should be evaluated. This charter can become the foundation of everything else.
Finding the Right Advisors
Armed with the charter, we can approach investment advisors; like, two from banks where the family already had relationships, and one from outside. We won’t ask the potential investment advisors to solve everything. Instead, we narrow their focus and ask them to build model portfolios of mainstream marketable securities that aligned with the family’s goals. Because the family’s values were clearly laid out using the family charter, the advisors were able to respond with simple, easy-to-understand portfolios.
The advisors’ recommendations might include:
- Stocks: Some suggested focused portfolios of individual stocks benchmarked to a global ETF; others recommended the ETF itself. (20%)
- Bonds: Laddered bond portfolios alongside bond funds, all aligned with the family’s values. (50%)
- Alternatives: Renewable energy partnerships and funds. (20%)
- Cash: High-interest savings accounts for liquidity. (10%)
Creating an Impact Investing Sleeve
But what about the family’s desire for impact investments? This is where we can design something unique and plug into our impact investing network. Since we don’t give direct investment advice, we can create a process that delivers opportunities on a “silver platter.”
We can assemble a volunteer committee of experienced impact investors to source and curate deal flow. Each quarter, the committee presents 1–3 opportunities to the family. The family can decide whether to proceed, and we handle the paperwork and coordination with their advisors. This way, the family takes ownership of impact decisions, gains hands-on experience, and remains true to their values.
Ongoing Reporting and Oversight
Finally, we must build a process for accountability and review. So every quarter, our office will generate a comprehensive performance report using Addepar. At a quarterly meeting (whether in person or over Zoom) we review the results of the marketable securities portfolio and present the new impact opportunities. This ensures the family always knows where they stand financially and values-wise.
The Result: A Bespoke Values-Aligned Portfolio
What the family gains from the process described is more than a portfolio. They now have a framework for investing that reflects who they are. Their marketable securities portfolio provides a stable foundation, while the impact sleeve gives them room to live their values in a tangible way.
The service we provide costs only a modest fee (just a fraction of what traditional advisors charge) but delivers something far more valuable: clarity, alignment, and peace of mind.
