Having
faith in your investment plan | | |
| Timeless advice
With a proliferation of faith-based mutual funds to offer, a growing
number of Christian financial planners have opted to bring their
faith into their work, providing everything from tax, estate and
philanthropic planning to debt counseling and investment advice
from what they call a "biblically responsible perspective."
Ron Blue, president of the 3-year-old, Atlanta-based
Christian
Financial Professionals Network, or CFPN, says his organization
of 1,200 gains 50 new members each month.
"Biblical truths are timeless.
We don't have to rewrite the Bible every time there's a tax law change,"
says Blue. "I've found that almost all good financial advice has its root
in a biblical principle. Diversification, using counselors, having a long time
horizon, setting goals, living within your income and saving for the future are
all biblical."
Robert Barber, president of the National
Association of Christian Financial Consultants which was started
in 1997 by Timothy Plan founder Arthur Ally, says his 200-member
group, which caters primarily to investment advisers, is growing
by five to 10 members a month. Many of his members also belong to
the CFPN.
The difference
How does a faith-based financial planner differ from
your garden-variety adviser? Planning sessions may begin and end
with a prayer. During investment planning, your adviser may consult
scripture in addition to a fund's prospectus. And your every financial
move might be weighed not only for its potential financial return,
but for its effect on mankind and your soul in the hereafter.
"There are 2,350 verses in
the Bible dealing with money," says Blue. "Therefore, if you're a professional
adviser and you're a Christian, you've got a wealth of wisdom to bring to the
table. You've just got to know what it is and where it is in the Bible."
Barber says looking beyond mere financial return pays
big dividends in other ways, as well.
"We look at more than how your portfolio is going
to affect you; we look at how it's going to affect eternity,"
says Barber. "By being biblically responsible, we have been
saved from companies like Enron, WorldCom, Kmart and Delta Air Lines.
All those companies have violated our screens and we didn't invest
in them."
Sometimes a faith-based
financial planner will go against the professional grain, even to the point of
turning down business.
"If he sees that an individual has too much debt,
he will many times advise them to start tithing and pay off debt
before investing," says Barber. "Because the agenda is
not based on the adviser's agenda; it should be based on what God's
word says about finance."
Given their screens and scriptures, how do faith-based
investment advisers fare against their nonfaith-based counterparts?
"SRI funds in general don't perform significantly
better or worse in the long run than mutual funds in general,"
says Morningstar's Kathman. But screens for things such as debt-to-capital
ratio and corporate giving may help steer a faith-based portfolio
away from volatility in general.
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