Building a portfolio that honors the entire family’s values
Customizing the family’s investing experience
Facilitating meaningful conversations with the family, which differentiated Peter’s approach from those of other wealth advisors
Over the next 20 years, Baby Boomers could pass down as much as $68 trillion in wealth to the next generations of investors. This transfer — the greatest in history — isn't without complications. For example, each generation has its own values and approach to giving. Baby Boomers and Generation Xers are most likely to support their chosen place of worship, children’s charities, animal rescues, and local social services, while Millennials also prioritize health charities, human rights, and international development.
This disconnect between values could cost many multigenerational families a lot of money. Millennials are particularly adverse to investing, which could cost them millions in savings. Forty-two percent of them are so afraid of losing everything, they choose not to invest at all. While only 28 percent of Baby Boomers feel the same way, finding ways to align on values across generations may help maintain or increase wealth while building a legacy. But how?
Here to show you is Peter Klein, a wealth advisor of ALINE Wealth Management. Using the Ethic Platform, which delivers investment personalization at scale, Klein helped a multigenerational family align its family values in an effort to create sustainable impact.
When a family came into wealth unexpectedly, they knew it was time to plan their legacy. Members of the family from several generations met with Klein to explore the prospect of forming a foundation through which they could give to meaningful causes.
“Families with a large philanthropic component to their investment strategies tend to outperform those without them,” Klein wrote in a 2022 article for MarketWatch. That may be because “families with aligned social interests tend to make investment decisions collectively, in support of the bigger picture, rather than for personal interest,” Klein hypothesized.
Klein was pleased that the family he was working with had chosen philanthropy. Now he needed to help the family align their interests by agreeing on a set of shared values, deciding how to invest and why, and committing themselves to investments that could make a big impact for decades to come.
Klein reached out to Ethic to help the family align and act on their values. Ethic shared a Values Mapping Exercise (VME) that Klein could offer to individual family members. An easy-to-use app, the exercise took only a few minutes of the family’s time, and it enabled them to first identify the values closest to their hearts and then find common ground. For instance, the family discovered that they all shared strong interests in racial and environmental justice.
Offering insights from the VME, Ethic supported Klein as he guided the family in crafting a mission statement for their foundation. With the family’s new awareness of their shared values, this conversation was “fluid” and “seamless,” Klein told Ethic.
Next, Ethic created a portfolio of companies whose actions aligned with the family’s focus on racial and environmental justice. Evaluating data on worker protections, community impact, energy efficiency, and more enabled Ethic to recommend companies to Klein and the family for potential investment. After Ethic’s presentation, which also covered meeting future financial and tax obligations, the family agreed on their equity portfolio in partnership with Klein and began to invest. Today Ethic’s visual, data-driven platform helps the family and Klein track and talk about the impact of the portfolio, engaging the family with their mission over time.
“Proactive empathy. Customization. Legacy.” That’s how wealth advisor Peter Klein describes the impact of collaborating with Ethic
Ethic helped Klein unite a family in building a portfolio that honors their values and forges their legacy. With their values and investments aligned, this family is likely to grow their wealth across generations. Ethic cultivates a commitment to legacy because it “allows the family to come together for a higher purpose,” Klein told Ethic.
Ethic helped Klein customize the family’s investing experience while working more efficiently. From the app that rapidly shed light on the family’s values to the easy-to-use platform showing the impact of their investments, Ethic created an experience of “proactive empathy,” allowing him to better communicate with the family while scaling his workflow across many clients, Klein said.
Ethic helped Klein lead meaningful conversations that strengthened his relationship with the family, which differentiated his approach from that of other wealth advisors. Partnering with Ethic gave Klein a greater understanding of the family’s values, emotions, and financial goals. With deeper insights, Klein felt empowered to lead deeper conversations with the family. “We’re talking about something that most financial advisors don’t speak about,” he told Ethic. According to Klein, this ability to reach out to clients to build more meaningful relationships sets his wealth management practice apart.
Peter J. Klein, CFA®, CRPS®, CAP®, CSRIC® is the chief investment officer and founder of ALINE Wealth. Peter draws upon more than three decades’ worth of experience to provide guidance rooted in the science of investing to ALINE’s clients. Peter helps clients navigate family trusts, institutions, and nonprofits, aiding in the establishment of their legacies. He also specializes in ESG investing, with a focus on investing in water. For more information, please visit www.ALINEWealth.com.
ALINE Wealth is a group of investment professionals registered with Hightower Securities, LLC, member FINRA and SIPC, and with Hightower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through Hightower Securities, LLC; advisory services are offered through Hightower Advisors, LLC.
This material includes commentary from ALINE Wealth which is a Client of Ethic Inc. No direct or indirect compensation was provided for Client’s participation in the creation of this material. There are no known conflicts of interest resulting from Ethic Inc.’s relationship with Client.
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