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Morgan Stanley Introduces Catholic-Focused Investing Program

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The influence of Pope Francis’ recent visit to New York is being felt at Morgan Stanley (MS). The wirehouse said early Friday that it is rolling out a tool kit for financial advisors based on Catholic values.

“We are pleased to provide our [individual and institutional] clients with strategies to pursue risk-adjusted financial returns in tandem with faith-based objectives,” said Hilary Irby, Head of Morgan Stanley’s Investing with Impact Initiative, in a statement. “There continues to be a growing range of investment choices and opportunities in the Catholic values space, across mutual funds, exchange-traded funds and separately managed accounts.”

According to the firm, the initiative aims to help investors “customize their portfolios to align with their personal and institutional faith-based goals.”

It is part of Morgan Stanley’s broader Investing with Impact Platform, which was introduced in 2012 and includes more than 130 investment products focused on environmental and social impact investing.

News of the company’s Catholic-values rollout came on the same day that the Rainforest Action Network staged rallies in nine major cities calling for Morgan Stanley to divest from the coal industry. According to the group, Citigroup said recently it would make cuts to its coal-financing projects, and Bank of America also made a similar pledge.

In early June, Morgan Stanley issued a $500 million green bond to fund the development of renewable energy and energy efficiency projects. As for when it may consider changing its approach to coal, the company referenced its enviornmental policy statement that says it is “committed to considering environmental issues in all aspects of our business, including how we evaluate companies, transactions and risk … and how we promote and develop new market opportunities. We believe that our approach to environmental issues helps us pursue our principal focus of creating long-term value for our shareholders and serving the long-term interests of our clients.”

The company’s Catholic-values program can assist investors who want to invest in firms that support affordable housing, high environmental standards and other constructive policies, according to a press release: “It also provides guidance to investors who seek to avoid companies that engage in discrimination, predatory lending or other activities inconsistent with Catholic values.”

Bank of America-Merrill Lynch (BAC) says it officially launched its Impact Investing/ESG (Environmental, Social, and Governance) program in August 2013. As of July 31, BofA’s investment businesses had more than $9.8 billion in assets with the ESG approach. Overall, the company says, sustainable, responsible and impact investing assets worldwide (across the industry) now approach $6.57 trillion, roughly double 3.74 trillion.

A call to UBS regarding similar offerings was not returned as of press time; Wells Fargo declined to comment on the matter.

The number of advisors with Morgan Stanley as 15,771 as of June 30, down from 15,916 in Q1’15 and 16,316 in Q2’15. Average annualized revenue per rep (or fees and commissions) rose 8% from a year ago to $978,000, behind the production level of both Merrill Lynch and UBS.

Total client assets were $2.03 trillion, or roughly $203 million per rep.

— Check out Impact Investing Returns as Good as S&P 500: Wharton on ThinkAdvisor.


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