How Wallick Investments puts faith first for their clients
By Dustin Waters
Far from the popular stereotype of the slick-haired, suspendered moneyman hellbent on making a dollar sits Daniel Wallick of Wallick Investments LLC, a faith-based investment firm based in Columbia where their customers’ peace of mind is part of the bottom line.
Wallick is amicable and careful to choose his words. A University of South Carolina graduate, Wallick gained experience as a broker at Merrill Lynch and an investment representative with South Carolina Bank and Trust before setting out on his own. As managing partner and chief investment officer of the firm, he founded Wallick Investments in 2005 with a commitment to providing a disciplined, factor-based investment process aimed at achieving exceptional performance without moral indifference.
“Our goal is to provide consistent top-quartile performance without owning companies that might offend someone who appreciates Christian values,” Wallick says.
“In 2005, neither factor-based investing or faith-based investing were very prevalent. Today, after being redefined as ‘smart beta’ investing, factor-based investing has become all the rage,” he adds. “Although more popular than it was in 2005, faith-based investing is still in an emerging stage. If you want to combine both factor-based and faith-based investing, you have very few choices.”
According to Wallick, his clients are primarily concerned about avoiding investments that may in some way go toward the production and distribution of pornography. This is followed closely by manufacturers of abortion products, but the list disqualifiers continues from there.
“Most all individuals have their own ideas of what would constitute an immoral activity. Some would include alcohol, tobacco, and gambling in their list, while others might not. We stress drawing a line in order to avoid indifference,” says Wallick. “Our ‘line’ may not be perfect for everyone, but we feel it is a minimum. We add tighter restriction upon a client’s request.”
According to their tenants of strategic moral investing, Wallick Investments screens out companies that significantly promote “pornography, abortion, contraception, predatory lending, embryonic stem cell research, weapons of indiscriminate destruction, and other activities in opposition to life-affirming pursuits for society.”
This net gets tighter for those who opt for Wallick’s “Excelsis portfolio,” which excludes businesses promoting alcohol, tobacco, and gambling, while factoring in companies who rate high in serving the common good. This means said companies are listed among the best corporate citizens by Forbes and Corporate Responsibility Magazine, tend to have larger employee ownership plans, and demonstrate stewardship by focusing on environmental, social, and governmental issues.
“There is also that they are trying to provide a quality product at a reasonable price, and take care of shareholders, employees, and communities all at one time to the best of their abilities,” Wallick says.
In evaluating whether or not a company truly acts as a force of good in their community, Wallick considers potential honorees in terms of their stewardship, respect for human dignity, subsidiarity, solidarity, and work toward the common good. Last fall, Wallick Investment’s top-two strategic moral investing honorees were the John Deere Company and Clorox.
According to U.S. News and World Report, there are currently more than 250 “socially responsible funds” operating in the United States, but less than 50 of these could be considered “religiously responsible.”
A 2010 study conducted by John Adams, assistant professor of finance at the University of Texas, and Parvez Ahmed, director of the University of North Florida’s Center of Sustainable Business Practices, compared the performance of faith-based funds to all U.S. mutual funds over a decade. From 1998 to 2009, the study found that the average annual return on faith-based funds was 4.6 percent, while overall funds returned at 5.7 percent.
For Wallick in particular, he credits “being able to sleep in peace at night” as a benefit for the firm’s staff and clients. Asked about how he feels about the Gordon Gekkos and other unscrupulous investors who dot the pop culture landscape, Wallick is of the opinion that the money, power, esteem, and recognition that the wealth management industry offers can be very enticing and is inherently fraught with opportunities for immoral and deceptive practices.
“The popular culture’s portrayals represent extreme examples of individualistic, self-absorbed behavior, which falls prey to these temptations,” Wallick says. “Although there are still way too many investors selling products primarily to line their own pockets and egos, the truth is some investors do attempt to act as their clients’ fiduciaries, keeping their clients’ ‘best interest’ in mind at all times.”
He adds, “It comes down to whether the investor loves his or her clients for what they can do for them or if they truly desire their clients’ ‘good’ and are willing to sacrifice to help them achieve it.”