Faithful Investing (In an Age of Complexity)

When Bernie Madoff’s Ponzi scheme unraveled in late 2008, a watching world was reminded of a frightening financial reality. Many of us entrust the vast majority of our assets to investment advisors without asking many questions — especially if they (seem to) produce favorable financial returns. 

This is not to pour salt in the wounds of Madoff’s victims. But part of the horror in hearing about Madoff’s scheme, and others like it, is that they raise a haunting question: Could it have been me? Preferring an investing model of “set it and forget it,” many of us have not really done the due diligence to appropriately vet our financial advisors or fund managers. Fortunately, though, when one looks at the odds, very few of us will be victims of a Madoff-like scheme. 

But there is a more insidious danger to the outsourcing of financial management. Most of us long to live integral lives, with core convictions and values that consistently guide all our decisions. Nevertheless, many of us have thoughtlessly ignored the need for personal wholeness in one of the very places we most need it — in the stewardship of the financial resources God has entrusted to us.

Or put another way, if we give latitude to financial advisors to invest our money without communicating our values and convictions, they may invest in companies, directly or through mutual funds, that operate in ways that are entirely at odds with our values. In which case, the fault lies at least as much with us as with them.

One could, for example, imagine Dave Ramsey inadvertently ending up with an investing portfolio full of credit card companies. Or the American Lung Association accidentally investing pension funds in tobacco corporations. 

In fact, we don’t have to imagine. Several years back, Justin Welby, the Archbishop of Canterbury, committed publicly to taking on the payday loan industry in England because of the exorbitant interest rates it was charging poor people. But the day after the start of that campaign, the Financial Times revealed that the Church of England’s own pension fund was, through an intermediary, a big investor in Wonga, one of the UK’s largest payday lenders. Very embarrassing.

Most of us don’t want to find ourselves in a similar position — with investments that are profiting from products and services we find repugnant. 

There is a reason, though, why so many people simply entrust money to a financial advisor without asking questions, or choose mutual funds simply by looking at the 10-year average return without getting caught up in the details of what companies, and what kinds of business models, are part of the portfolio. 

It takes time and expertise to vet companies, and most people are not financial professionals. Even if one takes the time to examine the top 15 companies in a fund, it is not always clear what many of the companies do, much less whether they serve or exploit their supply chain, or treat their employees well or poorly. 

And even if this information were more easily accessible, actively managed funds are constantly changing their investments. The informational upkeep needed to invest with integrity is daunting. 

So how can those who want every area of their lives to reflect the Lordship of Christ faithfully invest their financial assets? 

The Bible often uses a word that encompasses the idea of entrusting important tasks to others who will act in one’s stead (especially on behalf of an owner or ruler). In the Bible, this is the idea of stewardship. In fact, the quintessential steward is a household manager or superintendent whose management activities reflect, and carry out, the desires of the household head. 

We should think of ourselves as stewards of the assets God has entrusted to us and, of course, doing so is a good thing. But we must go a step further. We must understand that our financial advisor or asset management company is also a steward — not only of our financial returns, but of our convictions and values, as we seek to remain accountable for our finances under the Lordship of Christ.

By way of analogy, consider a parent looking for the best school for their child. While they themselves may not be competent to teach most academic subjects, and will not be present for the moment by moment operations of the school, they take on the responsibility to vet the school in a way that aligns with their convictions, whether religious, philosophical, or otherwise. The parent is the steward of the child under God, but the school is also a steward of the child’s education, fulfilling the desires of the parent. 

Or consider the hiring of a contractor for a kitchen remodel. We may solicit the contractor’s counsel about a great many aspects of the project, knowing they have experience and expertise well beyond our own. Still we know that primary responsibility for the key decisions, and final outcome, rests with us. 

Likewise, God is perfectly pleased for us to outsource tasks to those with specialized expertise. But he never allows us to outsource our moral responsibilities — including when it comes to our investing.

For investors, then, stewardship means that we take very intentional steps to vet our advisors, articulating our values and making sure we work with someone who applies an appropriate ethical grid to the companies and/or asset managers they recommend. In other words, we can turn to our advisor for information and expertise, but not as a way to ignore our own considerable moral responsibilities. In this way, as stewards under God, we assume our rightful ethical responsibility to manage the resources he has entrusted to us. Faithful financial stewardship requires no less.