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Values-based investing aligns with clients’ principles

by May 29, 2019Advisor perspectives

Values-based investing aligns with clients’ principles

by May 29, 2019Advisor perspectives

Jeffrey Scrimenti • Salem, OR
Innovation Partners LLC
Read full biography below

Proactive Advisor Magazine: Jeff, describe your overall philosophy in working with clients.

My objective is to help individuals achieve their important life and financial goals. I want to put together and implement a broad, but cohesive, set of strategies that can address financial needs in many areas for clients and their families.

I have been in the financial-services industry for over 30 years. I started as an insurance agent and added licenses and training in the investment area, becoming immersed in the principles of financial planning. Ultimately, I adopted an advisory practice model. I think of myself as a little bit “old school” in terms of having a broad background in many product and service areas. I also have a strong commitment to client service and uphold high standards in serving clients’ best interests.

But I think I am also “new school” in terms of my understanding and application of modern approaches to portfolio construction, investment risk management, and financial planning. I am a big believer in lifelong education and enthusiastically exploring new opportunities and best practices, both personally and professionally. I think having that mentality has a direct benefit for my clients as I formulate customized strategies that help them to meet their financial objectives.

What types of clients do you work with, and what services do you provide?

I work with a wide range of individual and business clients, both younger and older and from various backgrounds. I engage with clients in many different areas: budgeting and debt management, insurance planning, financial and retirement planning, investment management, college-funding planning, analysis of retirement benefits, and tax-advantaged financial strategies. My broker-dealer, Innovation Partners LLC, is a sophisticated financial-services organization and offers a variety of resources across investment, insurance, employee benefits, trusts, and charitable-giving solutions. I can access these services on an as-needed basis for clients.

I think one of my strengths as a financial advisor is analyzing a client or client family’s total financial picture and making informed and suitable recommendations on how the elements of a financial plan can work together. This includes analyzing cash flow; looking at assets in both qualified and nonqualified plans; exploring efficient budgeting practices for mortgage, educational, and other large household expenses; identifying risk-management strategies; planning for tax-advantaged accumulation and distribution of assets; and the overall wealth-building process.

Younger clients who are still in the wealth-accumulation phase typically are busy with their careers and families. This type of client generally desires guidance on areas such as budgeting, insurance protection for their family, education funding for their children, understanding their benefit and retirement plan options, and investment planning. They want to make sure they are addressing the right questions about their finances and laying a solid foundation for the future. I believe I can add a lot of value for them.

Older clients who are approaching retirement age or are already in retirement are fundamentally looking for financial stability as they move forward in their retirement years. The key question is how can they develop a retirement income plan based on their assets and potential income streams to afford a desired lifestyle for many years? There are several areas related to that: Social Security claiming strategies, tax-efficient growth and distribution of retirement assets, addressing the costs of future health-care needs, and legacy planning. People facing retirement are usually concerned about the volatility they have seen in the last 20 years in financial markets and with their investments. I want to help them develop a plan that aims to provide the returns they require while mitigating investment risk.


What areas of growth do you see for your practice?

The focus of my practice will always be providing core financial and investment planning for individuals and families. Moving to the advisory model over the years has gone very well, and I am pleased with the number of new clients that have been introduced to me through referrals. I am considering adding another advisor to my practice, or possibly additional administrative and technical support, to help handle the workflow with current and new clients.

However, I am also developing three specific areas with regard to the growth of my practice. The first is continuing to increase my presence in the small-business segment. I provide consultative services on benefits plans, usually focusing on retirement plans. This can lead to offering other personal financial and investment planning services to the owner of a business, so there is a dual benefit to this market.

The second is a relatively recent development. Working with third-party investment managers, I am able to offer clients direct management of their retirement accounts through what is called a self-directed brokerage account. That is very attractive to both younger and older clients, as they can receive professional money management of their chief retirement asset, rather than rely on their own instincts for portfolio allocations. While they may be extremely capable in their own careers, they usually do not have the time, knowledge, or confidence to feel they are keeping their investments on the right track—especially in terms of risk management during market downturns. This has proven to be very popular, especially for clients who work for the government or other nonprofits. It can be a valuable resource in the form of separately managed accounts for participants in 401(k), 403(b), or 457 plans.

“I think risk management is paramount for clients. …”

I am very excited about the third area, as are many of my clients. I like to call this life-affirming or values-based investing, which consists of socially responsible investing (SRI) and faith-based investing strategies or funds. Many clients are concerned with the types of companies their investment dollars are supporting and would like their portfolios better aligned with their principles. In my experience over the years, the feeling in the investment community was that this would mean sacrificing investment performance. I believe that is not the case. Companies that perform well on environmental, social, and governance factors can produce very competitive investment returns. One of the investment managers I work with offers actively managed strategies in the SRI and faith-based areas. This means clients can have investment strategies that are both risk-managed and values-based working in their portfolios.

In broad terms, how do you approach investing?

I started investing on my own in high school and have intensely studied the financial markets and investment theory ever since. Obtaining an MBA degree helped hone my analytical abilities, and I believe I can analyze investment strategies on a deep level. My goal is to help clients formulate an investment plan that is customized to their objectives, while mitigating risk and seeking enhanced returns.

I believe it is a benefit for my clients to have an advisor who has been trained in areas such as econometrics, statistical modeling and analysis, macro- and micro-economics, and financial analysis. Portfolios have to perform in a complex global market environment that is subject to various economic and market cycles. Understanding these factors helps me create suitable portfolio allocations for clients and identify specific investment strategies that can perform during those cycles.

I would describe my investment philosophy, both personally and for my clients, as more conservative than moderate. While there may be some portion of my clients’ portfolios that I will directly manage, I am moving more client money to separately managed accounts with third-party investment managers who have philosophies compatible with mine. Specifically, that means emphasizing diversification and using active or tactical strategies that can adapt to changing market environments.

I think risk management is paramount for clients, and strategies need to be aligned with their personal risk tolerances. I want clients to be able to take advantage of market opportunities but also to have defensive tools available for when conditions are not favorable and risk mitigation becomes the priority. Third-party managers have the research capabilities, dedicated staff, and sophisticated investment models to develop and implement strategies that seek competitive returns while mitigating risk.

I take great pleasure and satisfaction working with clients on their investment planning. It is a lifelong passion for me, and I dedicate a tremendous amount of time to each client’s portfolio allocations, making sure they reflect their overall planning objectives, risk tolerance, time frame, and comfort level. It is just icing on the cake when I can help clients employ values-based investment strategies that are aligned with their worldview and principles.

Guiding clients who desire principled investment strategies

Jeffrey Scrimenti is an investment advisor representative and registered representative with Innovation Partners LLC of Charlotte, North Carolina. Mr. Scrimenti says he is very excited about providing clients with opportunities to pursue what he calls “life-affirming or values-based investing.” In the process of addressing this rapidly growing area of his practice, he has developed the following key considerations in his investment planning process:
  • Making sure a client’s investment plan flows naturally from their overall planning objectives, risk tolerance, time frame, and comfort level.
  • Identifying if a client has an interest in exploring principled investment strategies in the areas of socially responsible investing (SRI) and/or faith-based investing.
  • Educating clients that companies performing well on environmental, social, and governance factors can produce very competitive investment returns.
  • Determining the specific role principled investment strategies can play in the client’s portfolio allocation.
  • Working with third-party money managers that provide risk-managed investment strategies in the SRI and faith-based areas.
  • Scheduling regular reviews with clients to monitor their overall portfolio performance versus their own goals-based objectives.
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Jeffrey Scrimenti is a financial advisor located in Salem, Oregon. Mr. Scrimenti has over 30 years of experience in the financial-services industry and is an investment advisor representative and registered representative with Innovation Partners LLC of Charlotte, North Carolina.

Mr. Scrimenti grew up in a small town just outside of Erie, Pennsylvania, and was one of 10 children. His father was in the automotive business prior to becoming a high school teacher who developed and taught courses in distributive education (job preparation and training). His mother was a homemaker who, says Mr. Scrimenti, “did a remarkable job keeping the family on track.” Mr. Scrimenti enjoyed sports throughout his childhood but says a lot of his time was spent “working to save money for college.” Mr. Scrimenti invested in stocks while in high school and college, “starting a lifelong passion for the financial markets.”

Mr. Scrimenti attended Gannon University for a year before transferring to the University of Alabama, where he received a degree in business administration in two years. He worked during college at the Alabama International Trade Center and had a summer internship in Washington, D.C., with former Sen. John Heinz’s office. He took graduate courses at North Carolina State University, finishing his MBA at the University of Texas.

Mr. Scrimenti started his career with Prudential Insurance and has worked with several national financial-services companies. After spending several years in California, he and his wife moved to Oregon in 2002 where they live on a “beautiful working farm.” They have a daughter and a son, ages 18 and 20, respectively. Mr. Scrimenti is a Bible studies coordinator at his church and studies different theologies. He has been active with the Knights of Columbus and various charities affiliated with the Catholic Church. He enjoys landscaping, exercising, martial arts, learning Italian, and “spending time with family and friends.”

Disclosure: Securities and investment advisory services offered through Innovation Partners LLC, member FINRA/SIPC. Innovation Partners LLC and their representatives may not offer legal or tax advice. Individuals should consult their tax or legal professionals regarding their specific circumstances.

Photography by Joni Kabana

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