Sunday, December 8 2019

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Why finance can be a real force for good

Update: November, 30/2019 - 08:07

 

Brian Spence

Brian Spence*

Brian Spence explains why the financial services sector needs more recognition as a force for good this Christmas.

Back in the UK, every winter brings louder calls against the further commercialisation of Christmas – a trend which is hard to deny when decorations start to appear earlier and earlier each year. Now beginning well before Advent (and even as early as September by some measures!), the festive season can seem like a months-long frenzy of consumerism that is very far from the Christian origins of this sacred festival.

This juxtaposition of the temporal and the holy may make people uncomfortable as they contemplate the story of Jesus born in a humble manger contrasted to the ringing of the cash registers up and down the land. However, we do wrong to try to somehow hold the economic realities of life apart from our spirituality. Not only is money a huge part of what makes “the world go around”, it can also be a huge power for good.

The excesses of capitalism certainly do sit ill with Christian – and Christmas – values. The proper use of capital certainly does not. The rapid evolution of the investment sector is a case in point.

A force for good

The media back home loves to portray the financial services sector quite negatively at times, and as a committed Christian who is also a lifelong financial advisor, I am only too aware how often people mistakenly quote the Bible in saying that “money is the root of all evil”. Of course, the good book in fact denounces the love of money. That is a very important distinction.

Money, we are urged to recognise, is nothing worth loving in and of itself. The fluctuation of its intrinsic value over the millennia should mean we need no reminder, however. Money has taken the form of everything from shells and precious metals to paper, linen and now code. Fiat currencies are just fictions we all subscribe to and the miser who loves money for its own sake will soon only be able to dote on numbers on a screen.

It goes without saying then that we are wisest when we think of money as a tool to be put to use and that this should also be true in the investment space. This is not just a case of money making money, although that is true. Rather, it is the fact that how we deploy our wealth is one of the most important methods of self-expression there is.

Doing well and doing good

People tend to enjoy investing in their “home turfs” and it is always gratifying to see successful entrepreneurs acting as “investing angels” for those that come behind, for instance. But precisely aligning broader portfolios with our values is getting easier by the year now too.

All around the world, responsible/ESG and impact investing are on the rise. Investors are choosing not to invest in firms that contribute to the world’s ill and are channelling funding instead to those generating positive results for society or the environment, alongside financial returns for their backers. Investors have come to realise that there is not necessarily a distinction to be made between doing well for financially and doing good in a broader sense.

Putting wealth to work

Performance figures keep underscoring that point and as institutions jostle for the attention of the next generation, responsible investment products are proliferating all the time. All this makes me proud to be an investment advisor and someone who is part of putting wealth to work in the best possible way.

My work in Vietnam is highly varied, ranging from advising High Net Worth Individuals on holistic investment plans to brokering the M&A deals that help entrepreneurs realise their wealth. But during the festive season I’m trying harder than ever to recognise the positive impact, “on the ground”, that comes from putting capital to work.

It’s easy to become slightly distanced from what one does, but I think it pays to take a closer look at a time of year when “the money men” tend to come in for additional flak. Living, education and health standards have all been raised the world over by the investments – large scale and small – that the financial services sector brings into being, and that work needs to be ramped up right around the globe.

Investors are realising that they are real change-makers. As a new year approaches, I hope that we can all be a little more mindful of how we deploy our wealth – and of the immense good it can do.

* Brian Spence is managing partner of S&P Investments. He has more than 35 years of experience in the UK financial services industry as an investment manager, financial planner and M&A specialist. He is a regular contributor to the UK financial press and has a deep understanding of the financial services community. Brian’s column will reflect on all the challenges and opportunities within the Vietnamese market, bringing a fresh perspective to today’s hottest issues. The columnist’s email address is brian@sandpinvestments.com. 

 

 

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