‘Impact investing goes deeper than trendy ESG funds’  

Michael Reynolds, principal at Elevation Financial, is an entrepreneur at heart, having built and sold multiple businesses over two decades, including a digital marketing agency.  

For 23 years, he helmed the agency as it evolved from a fledgling startup to a thriving small business. But burned out by red tape, Reynolds sold up and took a brief hiatus to take stock before following his passion for personal finance.   

Today, as the sole proprietor of his RIA, the Indiana-based advisor cherishes the opportunity to make a tangible impact on clients’ lives across the US. “Transitioning back to working directly with individuals and families has been incredibly rewarding,” he says.   

The front and center of Reynolds’ practice is his specialty in ESG investing. He explains how he navigates greenwashing and what advisors can do to market themselves more effectively.  

IN: Why do you specialize in ESG investing?  

Michael Reynolds: How much time do you have? I like to go pretty deep because I prefer the impact component. A lot of times we see that ESG means just picking a couple of mainstream index funds that have an ESG label on them and calling it a day. A lot of that is trendy and greenwashing, and I don’t feel like it’s necessarily the right way to go or necessarily sincere.   

I like to make sure that if my clients truly want impact and they really have these progressive values that are important to them, we are choosing investments that truly make a difference. So I look for advocacy. I look for fund families that actually talk to corporate CEOs and lobby for policy change; that use their voice through shareholder advocacy and proxy voting to actually help these companies and encourage them to make real change that benefits our planet.   

You can find those fund families, it’s not difficult, but I think a lot of people just don’t go that deep into it. They just say, ‘Oh well, here’s a Vanguard fund that says ESG, so that must be it.’ That scratches the surface. I really prefer to go deeper into the impact component.  

IN: Do you find clients want an impact fund that focuses on a certain sector or theme, like energy?   

MR: I don’t personally go to that level of customization because I feel it’s not serving my clients well. Say, hypothetically, someone comes along and says, ‘Hey, I’m vegan, I want to be in a fund that is all vegan-friendly.’ Well, OK, but how long has the fund been around? Is it even reliable enough to have a track record? Is it responsible to put my client in that fund? Sometimes yes, sometimes no.   

My stance is I use models that align with general progressive values, positive environmental impact, positive social impact, inclusion and diversity, and good corporate ethics, and that covers a lot of the bases. Some advisors are very customized and say, ‘If you are aligned with this cause or that cause, we’ll customize your portfolio.’ It’s just my opinion that it’s not serving my clients well to sacrifice other things in exchange for this particular tilt they have. Usually, the progressive values I build my portfolio around serve most people.   

IN: Your first career was in web design and marketing, so what advice can you give advisors in this area?  

MR: You must really figure out, first of all, what you’re good at. Some people hate to write, some people love to write. Some people hate being in front of a microphone, some people love being in front of a microphone. Some people love doing video, most people hate doing video.  

It’s also important you then decide what you want to say. What’s your expertise? What do you love to talk about? What’s your target market? Then pick one or two channels that you want to be really good at and commit to owning those channels.