Christian Stearns
4 min
Updated: Mar 7, 2022
COLORADO SPRINGS, Colo. and NEW YORK, Oct. 20, 2021 /PRNewswire/ -- First Affirmative Financial Network and YourStake today announced a historic first: a direct index solution with data-driven Environmental, Social, and Governance (ESG) customization down to the company equity level, along with tax loss harvesting, and benchmark flexibility. The new Values Aligned Direct Index Solution (VADIS) is now available to independent advisors who were previously shut out of direct index solutions by both cost and minimum investment requirements.
The Values-Aligned Direct Index Solution allows more investors than ever before to align their dollars with the impact they want to see in the world, down to the individual company equity to include or exclude.
Through this partnership, investors and independent advisors can now benefit from YourStake's proprietary NoScore ESG data to help power portfolio optimization and customization in a direct index offering -- including automated tax loss harvesting capabilities and benchmark flexibility -- at the lowest possible cost, and with First Affirmative's hallmark active proxy voting and advocacy programs to vote investors' shares in alignment with their values.
"This is a big deal," said Theresa Gusman, Chief Investment Officer of First Affirmative. "I've wanted to bring this level of customization, accessibility and transparency to more advisors and their clients since I joined First Affirmative. YourStake's tools and data are a crucial piece of the offering, and together, we have the partnerships, structure and tools to make it happen, at a lower cost than any other solution available to our clients."
The joint First Affirmative-YourStake Values Aligned Direct Index Solution takes direct aim at the greenwashing and misinformation so prevalent in the industry by providing advisors and asset managers with a data-driven ESG approach designed to help drive transparent conversations about impact investing with their clients. Features include:
Add tax alpha to client portfolios: Clients have the ability to capitalize on tax loss harvesting opportunities and defer capital gains.
Personalized Client Value Alignment: Client onboarding tools are designed to identify a client's "ESG Personality Type" via the first-ever Myers-Briggs style questionnaire for impact investing.
Benchmark flexibility: Advisors can work with their clients to determine an appropriate and customized benchmark or risk profile for their portfolio.
Evidence-driven NoScore ESG Screens: Dynamic, personalized "NoScore ESG" screens for funds and individual stocks leverage transparent data from more than 100 independent sources that meet global regulatory standards.
Portfolio Optimization: Trading and rebalancing tools, powered by Orion with oversight from First Affirmative, use the client's personalized ESG screens to create tax-managed SMA portfolios, customized down to the individual company equities to include or exclude.
Back-end Support: Support from First Affirmative's multi-custodian back-office and investment teams.
Dynamic, Real-World Reporting: YourImpact Metaphor Metrics translate back-end ESG screens into real-world examples of investment impact tailored to clients' and prospects' preferences. Advisors and their clients may access an individualized YourStake impact performance report using their Orion portal, in addition to a traditional performance report.
"We have seen major trends toward advisors seeking direct indexing ESG solutions, and it's an honor to partner with such a visionary team and pioneer in the impact investing space," said Gabe Rissman, co-founder and president of YourStake. "This solution enables us to reach more advisors to help demystify traditional ESG scoring and avoid common problems like greenwashing or misinformation. Paired with First Affirmative's robust portfolio construction, analytics and back-end support, our hope is to inspire more meaningful and actionable conversations between advisors and their clients."
"We've knocked a zero off the typical minimum investment of direct index solutions, so that a larger universe of investors can take advantage of the tax management and benchmark flexibility afforded by a direct index solution, but still aligned to their ESG values," said George Gay, First Affirmative CEO and founder.
"SRI used to be an industry of less bad/close enough. Now an individual client can eliminate what they consider to be bad and get very close to exactly what they want, rather than 'close enough.' Today we're making the benefits of direct index solutions available to a much bigger pool of investors to align their dollars with the impact they want to see in the world," Gay added.
For more information, visit: https://www.firstaffirmative.com/values-aligned-direct-index-solution/
About YourStake:
YourStake is a platform that equips asset managers and financial advisors with all of the tools, data, and reporting metrics they need to make sustainable investing more meaningful and accessible for their clients.
Creator of the ESG Personality Type, YourStake pairs 100+ independent ESG (Environmental, Social, and Governance) metrics with personalized client values to create custom investment solutions. Performance analytics are transformed into real-world impact scenarios via ESG Metaphor Metrics, giving advisors the confidence and trust needed to have deep-dive conversations about ESG.
Founded in 2018, YourStake serves firms representing over $250b in client assets and is a Public Benefit Corporation. For more information, visit www.yourstake.org
About First Affirmative:
Since 1988, First Affirmative has been helping financial advisors and their clients create investment solutions designed to meet both financial and impact goals. First Affirmative's unmatched institutional grounding in this ecosystem allows them to deploy the fundamental research, quantitative techniques, portfolio construction and management methodologies to deliver outcome-oriented SRI and ESG investment solutions. First Affirmative is proud to have adopted the highest standards as an investment fiduciary. First Affirmative is a Certified B Corp and was honored as a "Best for the World" Company in 2019 by B Lab, the parent organization for Certified B Corps.
SOURCE First Affirmative Financial Network
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