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Industry Spotlight > Broker Dealers

Founders Financial Expands Into Sustainable Investing Strategies

By Ginger Szala

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Pushing into the sustainable investing/ESG space, Founders Financial Securities, an RIA and independent broker-dealer based in Towson, Maryland, has added several new strategies to its second-party asset management platform that have no account minimums.

The move comes due to high demand from the firm’s clients, typically small to midsize independent advisors, who have told Founders “consistently” that there is “the need for an integrated solution that empowers the construction of portfolios comprised of sustainable investments,” said President and CEO Bradley Shepherd in a statement.

The firm added five strategies.

“We’ve launched our first dedicated series of SI-focused strategies,” Peter Murphy, chief investment officer, told ThinkAdvisor. “And within that strategy we will only use funds that embrace SI principles like those offered by Calvert and Pimco and Pax and the like. It’s the strategies that are available, not just a listing of funds. It’s an important distinction.”

He said that the strategies are more “holistic” than just one focusing on reduced carbon or other SI areas. In addition, there are multiple levels for customer risk appetite.

The new products will be part of Founders’ second-party asset management platform, Freedom Capital Management Strategies, which is for advisors who want the scale and efficiency of a third-party management platform while providing them “a voice in the ongoing development of the platform and a story that integrates seamlessly into the value proposition and branding of their enterprises,” Murphy said.

With growth of the SI market, the firm felt there was now enough product available that met their due diligence restrictions.

“We’ve been monitoring the space for several years as an investment team, and for the first time in the past 12 months, we’re really seeing an increase in the number of quality offerings,” Murphy explained. “We have a pretty rigorous due diligence process, and any fund that we invest into our strategies has to meet those quantitative and qualitative metrics that we go through. But in the context of the SI strategy, we add another layer of evaluating with the SI principle … And we just found in recent times that there’s enough breadth of offering for us to build a diversified portfolio that is comprised exclusively of these funds.”

— Check out How to Understand ESG Ratings on ThinkAdvisor.

Ginger Szala

@gingerszalaink

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