Investors like you are, by definition, actively planning for your financial future. At Merriman, we understand that you also want to make sure the world is bright for future generations.
To help align your investments with your values, we offer our Values-Based Investing portfolios. These portfolios are built in a manner consistent with our overall investment philosophy and designed to deliver similar after-fee, after-tax returns while offering you the ability to have an impact through your investment choices. One of these values-based options is our Sustainability portfolio. The UCLA Sustainability Committee defines sustainability as “the physical development and institutional operating practices that meet the needs of present users without compromising the ability of future generations to meet their own needs, particularly with regard to use and waste of natural resources.”
Our Sustainability portfolio focuses on including and overweighting companies that score high on sustainability measures. By choosing this portfolio, clients have the ability to shift money away from companies that have negative environmental impacts and into companies that rank better than their peers.
For the equity allocation in our Sustainability portfolio, we have selected funds managed by Dimensional Fund Advisors. When it comes to determining environmental impact, Dimensional’s approach to sustainability investing stands out. While many asset managers offer binary screening to exclude certain securities, Dimensional tilts toward companies that rank high on its sustainability framework while reducing the weight of companies with negative scores. This approach ensures a company doing better than its peers is rewarded even if it lags behind other companies in different sectors. This process is important because while a software company won’t have a very large environmental impact, investing in an energy company that has better environmental business practices than its peers can end up being more impactful on reducing carbon emissions in the future.
Incorporating sustainability considerations is a complex task. The sustainability funds we have selected use a Sustainability Scoring Framework on an industry level. The table on the right shows how the sustainability scores are determined, taking into account both the greenhouse gas emissions the company reports as well as potential future emissions from their fossil fuel reserves. This process penalizes companies that enable others to emit more or will themselves emit more in the future.
Dimensional also screens out companies with particularly negative practices around factory farming, cluster munitions, tobacco, and child labor.
Equities aren’t the only asset class where our portfolio includes sustainability considerations. Real estate has a high environmental impact and is an asset class where we are able to successfully incorporate sustainability considerations with minimal impact on investment returns.
Per the UN Enviroment Programme (UNEP), “The construction and operations of buildings account for 40% of global energy use, 30% of energy-related GHG emissions, approximately 12% of water use, nearly 40% of waste, and employs 10% of the workforce.”
As shown in the graph below using data from the Intergovernmental Panel on Climate Change, buildings have the lowest cost to reduce emissions. A great example of this comes from the iconic New York Empire State Building, which in 2010 underwent a retrofit. Windows were rebuilt, HVAC was replaced, and reflective insulation was installed. These changes resulted in the building having an annual energy reduction of 38% which translates to a cost saving of $4.4 million per year. This type of cost saving is also beneficial to the investment as profits from these endeavors are passed through to the investors.
Source: VERT Asset Management
We are partnering with some of the most informed individuals in the field of sustainable real estate investing by using the groundbreaking Global Sustainable Real Estate Fund from VERT Asset Management. This fund targets companies that meet a threefold criteria of environment, social, and governance factors. These include both positive and negative screening and tilts. The fund overweights REITs with energy, GHG, and water reductions and also screens out prisons, businesses, or companies with environmental fines. The Venn diagram below shows how VERT incorporates a multi-dimensional scoring methodology. VERT focuses on companies that exhibit “Comprehensive Excellence,” those that fall in the middle of the Venn diagram. After this, VERT targets “Focused Excellence” REITs which fall into two of the Venn diagram categories. In this way, VERT builds a portfolio targeting the best of the best first.
Source: VERT Asset Management
There is more than one way to invest in line with your values. Whether by using sustainable funds like those from Dimensional and VERT, or one of our other investment offerings, Merriman is by your side. We want to make sure your investments not only fulfill your financial goals but also allow you to live fully, knowing that you are making a difference for future generations.
During my senior year in high school, I was invited to go backpacking in Yosemite with the Yosemite Institute. I had been backpacking many times before with my father all over California. We even climbed the tallest mountain in the continental United States (Mount Whitney) when I was 14. I loved the adventure and challenge of backpacking. In those early years, I didn’t realize the importance of being in nature. It wasn’t until the Yosemite trip that our guides taught us about the history of the national parks in the delicate balance between the visitors and the surroundings. They also taught us the importance of taking care of our planet. When my classmates and I stopped in a McDonald’s on the way home from Yosemite, I remember taking the Big Mac out of the Styrofoam container and asking them to reuse it. Back in the 80s, I don’t think climate change was on many people’s radars. Today, the science of climate change makes me want to do everything possible to care for the planet for the generations to come. I’ve always done my part but drew the line when it came to investing sustainably. My thought has always been to maximize returns in my investment portfolio and give charitably to causes that fight climate change.
I just didn’t believe that I’d be able to diversify enough (too risky). I believed that returns would be lower in part due to higher expenses. I also got confused about the differences between being socially responsible and sustainable investing. There are also a lot of acronyms and terminology to understand, such as SRI (Socially Responsible Investing) and ESG (environmental, social, and governance).
The history of Socially Responsible Investing (SRI) goes back as early as Moses in 1500 BC. In more modern times, the 1950s saw the first mutual fund, the Boston-based Pioneer Fund, to avoid “sin” stocks: companies that dealt in alcohol, tobacco, or gambling.
While I don’t love to support alcohol, tobacco, and gambling, my values aim to focus on investments that help the planet. My values seek to focus on the “E” in ESG: the environment. Doing well while doing good.
Sustainability investing is a choice and investors decide whether aligning their investment decisions with their environmental values is right for them. At Merriman, we believe that, all else being equal, a sustainability investing strategy should generally reward companies for acting in more environmentally responsible ways than their industry counterparts. This belief is in contrast to many other sustainability investing approaches that exclude entire industries regarded as the worst offenders. Sustainability strategies place greater emphasis on companies considered to be acting in more environmentally responsible ways while also emphasizing higher expected return securities. This approach enables investors to pursue their environmental goals within a highly diversified and efficient investment strategy.
It feels like we have both been on the same journey to the top of the mountain to build a portfolio that focuses on the environment without sacrificing risk-adjusted returns. Merriman recently announced major changes to our values-based portfolio, and I have moved all of my investments into our new portfolio. When I combine a sustainable portfolio with charitable giving, it is one small way to do my part in “leaving no trace behind.” If you would like to learn even more about our approach, you can read “Incorporating Environment and Social Values into Your Merriman Portfolio”.
Merriman Wealth Management, LLC, an independent wealth management firm with over $2.5 billion in assets under management, is pleased to announce the promotion of Geoffrey Curran, CPA/ABV, CFA, CFP® to principal.
“Geoff’s contribution and dedication to Merriman and our clients has been invaluable as we seek to be the destination for clients and employees who are looking to Live Fully,” said Jeremy Burger, CFA, CFP®, CEO of Merriman. Merriman is proud to offer a path to partnership for those individuals who demonstrate through their contributions a strong commitment to improving the lives of our clients, helping the firm grow and giving back to their communities. With the addition of Geoff, Merriman now has 15 principals.
Geoffrey joined Merriman as a Wealth Advisor in January 2016 after spending three years at TD Ameritrade. Geoff graduated from the University of Tulsa and has earned three of the most distinguished credentials in the industry – CERTIFIED FINANCIAL PLANNERTM professional (CFP®), Certified Public Accountant (CPA), and Chartered Financial Analyst® charterholder (CFA). Geoff is an active member of the South Puget Sound community including serving on the investment committees for the Tacoma Employees’ Retirement System pension and the Greater Tacoma Community Foundation.
Lowell: I’ve worked at Merriman for 13 years. I started in client services before moving to my current advisor role. I made the switch because I wanted to help people achieve their goals and provide peace of mind along the way.
Scott: What do you love about working here?
Lowell: The opportunity to help my clients articulate, achieve, and expand upon their financial and associated life goals.
Scott: What’s on your wish list for the next 10 years?
Lowell: To raise my children in a way that they are responsible, give back, and are well rounded. Professionally, I want to continue developing in my career; and now that I’m getting older, I’m excited to help the next generation do well and advance through their careers.
Scott: If you could give one piece of advice, what would it be?
“‘Would you tell me, please, which way I ought to go from here?’ said Alice.
‘That depends a good deal on where you want to get to,’ said the Cat.
‘I don’t much care where—’ said Alice.
‘Then it doesn’t matter which way you go,’ said the Cat.”
–Lewis Carroll, Alice’s Adventures in Wonderland
What an amazing quote! My takeaway is that if you have clear direction, you can achieve whatever you set out to do.
Scott: Where are you originally from?
Lowell: Issaquah/Preston/Enumclaw, WA.
Scott: What’s the weirdest thing you’ve ever eaten?
Lowell: Chicken feet at Dim Sum in Vancouver, BC.
Scott: How was it?
Scott: What’s your hidden talent?
Lowell: I took up the guitar about 20 years ago and have steadily improved. My next level goal is to start playing acoustic sets at local venues.
Scott: What is the last experience that made you a stronger person?
Lowell: Coaching my son’s basketball team. Patience and repetition!
Scott: Merriman has employees take the StrengthsFinder quiz so we can understand how to best work with each other. What are your top five strengths?
Achiever: Those with the Achiever theme have a constant need for achievement. Every day they need to achieve, no matter how small. They take immense satisfaction in being busy and productive.
Learner: Those with the Learner theme love to learn. The process, more than the content or the results, is especially exciting for them.
Self-Assurance: People with this strength feel confident in their ability to take risks and manage their own lives. They have an inner compass that gives them certainty in their decisions.
Competition: People exceptionally talented in the Competition theme measure their progress against the performance of others. They strive to win first place and revel in contests.
Focus: People exceptionally talented in the Focus theme can take a direction, follow through, and make the corrections necessary to stay on track. They prioritize, then act.
Matt: I started in May 2019. When I first got started in this industry, Aimee Butler was my first real boss. We kept in touch, and she let me know about the job opening. It’s great to be working with her again.
Kim: What do you do at Merriman, and what’s your favorite part of the workday?
Matt: I am an associate advisor working with the advisors in the Eugene office, helping our clients by sitting in on meetings that have complex financial needs and working with a group to deliver a good financial plan, then creating a portfolio to back that up in a real way. I also enjoy getting out of the office to meet other professionals in the community to hear how they perceive how our community is growing and changing. I am currently studying for the CFP, preparing to become a wealth advisor and get more involved with helping clients plan for the big goals they have that don’t revolve around money. Money means different things to each client. Helping them figure out what it means to them and what’s the reason for having the money. Helping clients support local charities with monetary donations as well as them volunteering in the community.
Kim: Tell us about your family.
Matt: Laurel and I met when we were summer camp counselors in college. Ten years later, we have a 2 ½ year old son, Trey, and a 20-pound cat named Charlie. Trey loves Charlie, although sometimes we need to remind him to be gentle. We love living in Oregon and having so many breweries and vineyards to explore. On the weekends, we can be found exploring the local parks and eating at the amazing restaurants Eugene has to offer.
Kim: What was your favorite vacation?
Matt: My wife Laurel and I went to Iceland for our Babymoon, and it was the most beautiful place on the planet. Pictures just can’t do it justice. We enjoyed hiking to amazing waterfalls and checking out some of the filming locations for Game of Thrones. I am a huge Lord of the Rings fan, and after watching all of the Lord of the Rings movies and behind the scenes, I would love to go to New Zealand to see those places in the movie in person. I’ve heard the wine is pretty good there too.
Kristi: I’m the Chief Operations Officer (COO) and Chief Investment Officer (CIO) at Merriman.
In my role as COO I have the responsibility, together with Jeremy Burger (Merriman CEO) and Tyler Bartlett (Director of Advisory Services), of the overall success of the firm. My main goal is to ensure we’re delivering a great experience for our clients and for our employees. That involves all aspects of the business, from benefits and a great office environment, to making sure our people have the right skills and tools to provide our clients with the best possible experience.
As CIO, I oversee the research team and am responsible for making sure we have the best investments available for our clients. In my time here at Merriman, I’ve helped launch several new funds in collaboration with Dimensional Fund Advisors, championed the widespread adoption of asset location across client accounts, and centralized trading and portfolio management functions.
Overall, my team and I are focused on delivering ever greater value through outstanding service, diversified investment offerings, and easy-to-use technology.
Renske: What is your favorite part of the work day?
Kristi: For me, it’s always about making connections with people and bringing out the best in others. Whether it’s for an employee or a client, knowing I’ve done something to elevate somebody else’s game is enough to send me home happy every time.
Renske: Tell me a little more about your family life
Kristi: My husband and I have been married since 1998, and together since 1994 – more than half my life! We have two children: Piper, who will be 12 next month, and Anders, who will be 10 in May. Spending time with them is something I truly love and enjoy.
As a family we love to play boardgames, and we’re big into cooking. Now that the kids are a little older, we have been able to do some grand travelling. We went to Australia last summer, and this year we’ll visit the Netherlands and Greece. We’re already planning next year’s trip to South Africa as well.
Renske: Any fun facts we should know?
Kristi: I own a flag that flew in the space shuttle…is that cool?
Kristi: I used to work in rocket science, and all rocket scientist have something that flew into space!