Beacon Wealth has been a pioneer in the faith-based investing industry, providing holistic financial planning services while aligning with the values of their clients.
Cassie Laymon, President at Beacon Wealth Consultants, joins Michael to discuss her firm’s approach to selecting investments, working with clients to maximize impact, and the growth of faith-based investing.
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Episode Highlights
- Overview of faith-based investing and financial planning.
- Process for screening investments that are compatible with various faith-based strategies.
- Optimizing for more than just absolute wealth at death.
- Opportunities for financial advisors and business owners interested in faith-based investing.
- Comparing and contrasting faith-based investing with ESG.
- Changes in the industry over the last 20 years.
Today’s Guest: Cassie Laymon, Beacon Wealth Consultants
- Beacon Wealth – Official Website
- Beacon Wealth on LinkedIn
- Cassie Laymon on LinkedIn
- I Found Jesus in the Stock Market By Cassandra Laymon (Amazon)
About The Uncommon Advisor Podcast
The Uncommon Advisor podcast features insights from advisors who are embracing a modern and holistic approach to wealth management. Learn how the most creative minds in the industry are innovating their practices to deliver superior client results, generate new business, and maximize retention.
Transcript
Michael: Welcome to the show. I’m Michael Johnston. Joining me today is Cassie Laymon. Cassie is the president of Beacon Wealth Consultants, and she’s a pioneer in the faith based investing space. Cassie, it’s great to have you with me today.
Cassie: Thanks so much for the invitation. It’s good to be here.
Michael: So let’s start talking about faith based investing, I guess in general and faith based financial plans and portfolios more particularly. How do you explain this to someone who’s not familiar with this concept?
Cassie: Well, we are doing both of these things. We’re holistic financial planners. Most of the people on our team are certified financial planners. And so we are looking at all aspects of a client’s life. We’re looking at their goals and their dreams, planning for the future. And at the same time, we want to align our values with their values and with biblical values. So on the financial planning side, we think a lot about the use of money, right? Traditionally, we might be thinking about how can I make the most money. You know, that’s the number one focus. And, you know, we certainly think about that. We’re looking at fees and performance and all of those issues. But we also want to think about our money as God’s money. Right. So we are just think of ourselves as stewards of God’s money. So we’re also thinking about generosity. We are having conversations with clients about not how much am I going to leave when you know, I pass away, but how can I be a blessing while I’m here? How can I, you know, contribute to the causes that I care very much about or take care of my family in that way and and not just be thinking about, well, whatever’s left over at the end, then I’ll then I’ll give that away.
Cassie: So I think we have some very deep conversations in terms of financial planning and what’s important and aligning our values that way. And then, of course, the other thing that makes us unique is the way that we put together our portfolios. I like to think that we really have the intersection of. You know, very robust screening and I’ll explain what I mean by that. But also being a good fiduciary, right. We want to do what is always best for the client. And we just find that the clients who are attracted to Beacon Wealth care very much about the companies that they’re investing in and the business practices. So most people don’t realize anything about the businesses that they’re invested in. They just think, oh, I’m just invested in the market, and they don’t realize it’s actual companies that they’re investing in. And we look at, you know, both the things that we say maybe are not really productive business practices that we want to invest in, things that may include abortion and pornography and addictions and things that are harmful to people, but also, you know, be looking at things that really make the world a better place.
Cassie: So, so those are some of the things that we think about a little bit differently.
Michael: So, so I guess both in kind of an exclusive and an inclusive lens as you’re looking at the companies that you would invest in individually. Okay I want to come back to that in just a minute. I think it’s interesting the, you know, if I what I kind of heard you say about how you work with clients is you’re optimizing for more than just the money that is in the bank, right? I think there’s I think It’s a Wonderful Life. There’s a line I’m thinking of or they say essentially all you can take with you is what you’ve given away, right? So, so if I’m hearing you correctly, you’re, you’re optimizing clients to, you know, do all the right things in terms of, you know tax efficiency and minimizing fees and all these, these kind of things. But, but to, I guess, a slightly different and not to die with as much money in the bank as possible, but to have an impact, I guess, while they’re alive. And then after they’ve, they’ve passed away. Am I kind of thinking about that the right way?
Cassie: Absolutely. Yes. Yes. Without like, leaving a wonderful legacy for your life. Yeah.
Michael: Yeah, yeah, I think that’s I think that’s a great way to a great way to think about it. And I think that, you know, legacy, the word legacy I think has has, has maybe a little bit of baggage. It maybe feels like a little bit elitist. I don’t see it that way at all. I think that in a way, you know, if we’re not thinking about our legacy, if we’re not thinking about leaving the world a better place, then what are we even doing here? Right. So I feel like it’s kind of become a a little bit taboo in a way. Maybe maybe I’m wrong about that, but I don’t think it should be at all. I think that everyone should be thinking about their legacy, and I think it’s possible to have a legacy without, you know, having a building named after you. Right? Or.
Cassie: Absolutely. Absolutely. How did you touch the people that you came into contact with? How did you leave the world a little bit better place? How did you pour into your children and your family? Those are all part of what I think of in a good legacy.
Michael: Yeah, and I think, you know, that it gets very relevant when you talk about estate planning. You know, in a sense you could do estate planning. Well, how do I pay the least amount of taxes and give the most money possible to the next generation? That’s one way to think of it. That’s one variable to kind of optimize for. But I think a better way to think of it is how do I leave, like the right incentives and the right opportunities and the right the right impact that I, that I pass down. So I think that, you know, for a lot of advisors, estate planning or kind of helping think about that process is a really important, a really important service. Yeah. I think unfortunately a lot of folks just kind of optimize for that one variable. How do you pay the least amount of taxes and get the kind of the most money down to the next generation, which I don’t think is is a service to anyone including the people you’re, you’re leaving the money to. Right?
Cassie: Right.
Michael: So let’s talk a little bit more about the the screening process. I’d like you to elaborate. You mentioned that a lot of people don’t realize what’s in their portfolio. So if you’re not just buying the market, if you’re not just going to buy the S&P 500 or the Russell 2000 and just own everything how do you what’s the alternative? How do you do it? Yeah.
Cassie: So we have a process where we use three different screening providers or research providers that really they do a lot of the work looking into these companies and saying, what business practices are these companies involved in? And the reason we use three is every research provider looks at different things or they rate things differently. So we can take all of that data and bring it together. And we can say, are these the kinds of business practices we want to invest in? So I always think an easy one to think about is tobacco. Right. So I actually call it investing praying with our dollars. So when you are investing you’re saying to this company, take my money, do more of what you’re already doing. And I’m, you know, praying that it’s going to be more and more and you’re going to share the profits with me. So if you’re investing in a tobacco company, the only way you’re going to make more money is if we get more kids addicted to cigarettes. And there’s all kinds of stories about how really a lot of the profits in the tobacco. Industry now occur because of getting kids in third world countries addicted to cigarettes.
Cassie: And so when we think about that, okay, I’m going to see my portfolio going up, but I know it’s on the backs of more kids getting addicted to cigarettes. It just makes you stop and say, is that the way that I want to make money? Perhaps not for many of us know. And so we look at these different business practices, addictions, you know, pornography and adult entertainment, predatory lending. And we do on a very best efforts basis. We eliminate those both from our stock portfolios and our mutual fund portfolios. And instead we are looking at companies and funds that are, you know, really, like we say, looking to be a blessing in the world, right? How do we make the world a better place curing diseases, investing in things like clean water technology? How do we make the world a better place? Good products and services taking great care of their employees, active in their communities, those we call them shining light companies. But, you know, how can we do our very best to invest in the things that are going to help people to grow and flourish?
Michael: Yeah. So that’s a that’s a great way to think about the framework. So I guess kind of the obvious question is well is there is there a trade off. I mean are you giving up. Are you giving up return. By by excluding these companies that, you know, I think a lot of people would probably agree don’t don’t love the business practices or parts of the business practices. I wonder if there’s any, any research or how you kind of answer that question when, when folks come to you and say, like, this all sounds great, but am I, you know, am I giving up a big chunk of my return in order to do this?
Cassie: Over long periods of time. There have been studies that have shown that it’s pretty much the same. You know, the returns are pretty similar. If you screen over time and the Bry Institute has done some of that research, there’s others as well. But in any period of time, you know, one portfolio might be ahead of the other. So there might be a season where a faith based portfolio is a little behind, and then in another season where it’s ahead. So really, over time, all the studies have shown that screening doesn’t have a negative impact on your portfolio.
Michael: Got it. So you can have you can have something that’s consistent with your values without over the long term, giving up significant returns. And it’s a good point that, you know, you got to look over the, the long term. Investing is a long term game. And a lot of respects, and particularly in when you’re kind of comparing relative performances of different strategies, you’re always going to be able to cherry pick a section where faith based performing either over underperforms, I would guess you can typically do that whenever you’re comparing two things. You just got to pick the right cherries and you can make anything look look good or bad, right?
Cassie: Right, right.
Michael: So so how big of a of a cut are we talking here? So if you think about the you know, I don’t know if this is the way to think about it, but if you look at the S&P 500 or the Russell 1000, how many companies would you be. Does this process exclude from a broad basket like that?
Cassie: I don’t know that I can really give you a number, but I will tell you that most of the companies that we would be looking at cutting out are going to be, you know, in the the largest companies. Right? So I would say portfolios in the faith based world tend to tilt a little more towards mid-cap. It’s hard sometimes to get good exposure in the large cap sure area. I don’t know that I can really give you a number, but you’d be surprised it’s not as you’re not cutting out as much as you might think.
Michael: Yeah, yeah, I know that’s that makes sense. I think that’s a interesting way to kind of think about that tilt maybe towards towards more of the of the mid cap sector. And I would guess you kind of alluded to this a little bit kind of towards in a way from, from certain industries or at least certain subsectors here. Well I’m encouraged by the way that you are able to find what you call I think you call on the shining light companies. Sometimes I feel a little bit, you know, a little bit hopeless. Like, everywhere you look, everyone has questionable business practices, but it’s encouraging to hear that. You see you see plenty of shining lights out there. So. Yeah. Absolutely. We’re not all pessimistic here, right? We’re giving people reason to be optimistic about companies doing good in the world.
Michael: Right. I want to switch gears a little a little bit here. How do you how can you help other maybe other advisors are hearing this and they’re saying, you know, this sounds really interesting. This sounds like something I aligned with my values and aligns with my my client’s values. How do you help advisors who are maybe interested in adding this to their practice or are interested in this, this approach to to wealth management?
Cassie: Yeah, there are a few different ways. So when I married my husband, Rick, and joined Beacon Wealth Consultants, I had never really heard of biblical investing or faith based investing. So I feel like really put myself in the shoes of advisors that are just learning about this. And I have lots of one on one conversations with advisors. I’ve done, you know, lots of, you know, speeches at Kingdom Advisors and things like that. I also wrote a book about my process. It’s got a little bit of my testimony in the beginning because I wasn’t really hadn’t, hadn’t been a churchgoer in a long time, in about 20 years when I met my husband. And so to go from, you know, a practice where I wasn’t doing faith based investing, I wasn’t even talking. I didn’t even know if my clients were Christians to saying, guess what? We’re only going to do faith based investing now. It was a really big switch. So I feel like because I’ve walked in those shoes, I can kind of help advisors think through all of this. But what happens is a lot of times advisors get very excited. They say, this sounds fantastic. I either, you know, want to do this with all of my clients or even just a handful of my clients, and then they get into it and realize it is a little more complicated than what they might have thought.
Cassie: So, you know, we have an in-house team, an investment team, that this is all they do. I mean, of course they’re reading prospectuses, but then they’re also, you know, sifting through all this screening data and making good decisions. But if you’re just on your own, it is really hard to do all the research that’s required and take great care of your clients. So one of the things that we also do is we can be a subadvisor. So an advisor can use us and use our portfolios, and they can just really do the thing that they love to do, which is taking great care of their clients and growing their business so they can really delegate the portfolio management to us. And we, you know, we act as a tamp, really. We do all of the, you know, billing and cashiering and performance reporting and, and all of that for them to free them up to be able to work with their clients.
Michael: Yeah. Great. That’s a great answer there. I that happens a lot. Right? You think this sounds incredible. And then as you peel back kind of some of the layers of the onion, you realize, oh gosh, I got to do this and this and this. So that’s a great, a great service that, that you’re able to offer. I think you do something maybe not similar, but but let’s talk about, like the 401 K and 403 B space, because that’s a space where maybe this sounds good to a lot of people, but you’re those retirement plans can be relatively restrictive, right? In the sense that maybe you’re only able to invest in certain funds and you don’t have kind of the option to implement a strategy like this. So. So how do you help business owners who say, you know, this sounds this this sounds great. How do I do this within the retirement plan that I’m going to offer to my employees? Sure.
Cassie: Yeah. Well, so we have been doing faith based investing for over 25 years now. And so at the in the beginning, we just used to find that a lot of clients, right. Their most of their assets are in their 401 K plan. And they would say. Would really love to do this, but my only option is my 401 K and we were thinking, wow, we would love to be able to find a way to do this. And so when we hired our chief investment officer, Hillary Sunderland, she said, oh, I know how to do that. And so she helped us to build what we now call the Kingdom K and the Kingdom B. The thing I always emphasize to business Christian business owners is one you cannot make people invest according to your values, right? So we can make it an offering in your plan, but it is not the only offering in your plan. So we follow all the rules of the Dol. And so we have our faith based portfolios in the lineup. And then there are also other funds. If people want to invest differently, if they want to build their own portfolios, target date funds. And really in the end we are the 338 fiduciary. So for what people don’t know what that means, it means the business owner delegates all the responsibility for the investments to us. So, you know, I’m not going to the business owners and saying, hey, we have to change this fund. What do you think? Because they say, I don’t know, what do you think? We just take care of all of that for them, and we provide all the documents that they need for audits and things. And so we really make it easy for them to have a fantastic plan where the fiduciaries and we take good care of their employees and give them advice. So it just it gives them another option that aligns with their faith values.
Michael: Right? Right. I want to switch gears again here and talk about, gosh, I have so many different things I want to ask you about here. So, so in addition to we’ve kind of talked about individuals and families and businesses. Another part of what you do is services to pastors and to missionaries. Can you talk a little bit about I’m kind of fascinated by by that, how, you know, some of the unique challenges or opportunities and kind of how you view. I think I can guess why you do that in a fairly consistent with your with your values, but kind of what that process looks like. I would guess that there’s, you know, not a lot of financial advisors out there who are who are kind of catering to this demographic. So are they like any other client, are there specific, you know, considerations when, when working with those individuals or those organizations?
Cassie: Well I think one of the challenges is limited resources, right. So these are not usually folks that are high income earners. And so we care very much about, you know, maximizing what they do have. And to give you one example, right. So a 400 and 3B9 retirement plan is a retirement plan for churches that allows for what they call the pastoral housing allowance. So, you know, the pastor can save tax deferred. The church can contribute tax deferred. But when they go to take the money out, when they retire, if it is for housing expenses, it comes out tax free. So, you know, we talk to pastors who maybe are in a 401 K and they are missing out on this very you know, special opportunity for tax savings. So, you know, we have an opportunity to talk to them about, you know, here are some changes that we can make that are going to make a big impact to you considering your limited resources.
Michael: Yeah, it’s a great. So it sounds like essentially it sounds like almost an equivalent of an HSA of a health savings account. Right. And potentially a triple tax advantage. Am I thinking about that correctly. Tax deferred. And then it grows tax free. And then you withdraw tax free. Exactly. I mean, that’s the to use a bad metaphor, that’s the holy grail of tax advantaged investing, right. Is that the triple tax advantages? Usually if you can get one of them, great. Two of them even better. But all three is is pretty hard. That’s a great kind of concrete example of of how you can add value to, to that type of client.
Cassie: One of the other things I’ll just share as we’re talking about, you know, these 401 K plans or 400 3B9 plans. I find oftentimes advisors, they don’t specialize in this, but they might have a couple of people in their book of business, a couple of business owners, a couple of pastors that they know. And so one of the other things that we do for advisors is we partner with them they we can do a retirement plan and they can still be the advisor on it. Right? We don’t have to be the advisor, but we can, you know, help coordinate the CPA, the record keeper, the investments, and do all the expertise that comes with retirement plans and let them serve their clients, serve their pastors. And we just try to walk alongside them and help them in that way to add another service to their business.
Michael: Right. I want to kind of circle back here and ask you about something that I just I just thought of someone listening to this and they’re thinking you know, I do. I invest in an ESG mutual fund or an ESG ETF or something like that. Like I think I you know, I think I’ve got this covered. Like, I’m that’s how I make sure that I only invest in, in kind of good companies, companies who are doing good. I’m guessing you get that question sometimes. And I have some thoughts as to why you know, there’s issues with that. But I wonder how you would respond to folks who say like, oh, yeah, I do this. Essentially I have an ESG mutual fund or an ETF. How that how that is, is different and I’m guessing in some cases almost antithetical to what what you’re doing here.
Cassie: Well, and so one of the things we would, you know, screen their funds and show them exactly what they’re invested in, because sometimes what you think you’re invested in is not true. And there are some overlaps with ESG and faith based investing. But I would say two of the big areas that are very different are abortion and pornography are going to be probably very different in an ESG fund and a faith based fund. So those that’s just kind of one thing that we look at. But we do often with clients say, let’s take a look at your funds. Let’s go through and screen them and see what you are investing in.
Michael: I’m guessing that that’s usually a pretty enlightening process, right, folks? I’m guessing they’re fairly surprised at what’s actually in there. Is that right?
Cassie: Very surprised. Yeah. Very surprised. And you know, you can then put, you know, some percentages and numbers to it. This percent of your dollars is invested in this business practice that you may not really be very excited about. And that often is the mover for people to say, hey, I really do want to do something different.
Michael: The light bulb goes off. They get it. At that point, when you start to see dollars and percentages tied to to actual business practices.
Cassie: Yes, absolutely.
Michael: So speaking of business practices here, a couple a couple questions for you here. A couple last questions for you here. Something else that that beacon does is unique is you you donate part of your profits to charities. Can you talk about how that how that came to be and how you kind of implement that in practice?
Cassie: You know, it’s a biblical principle, right? Tithing and giving 10%. So it’s just very much in alignment with our biblical values that we would do that. And there are a certain number of different places that we support, places like FCA or Noble Warriors or our local pregnancy centers. There’s a lot of different places that we do that we’ve also done projects with our clients, like building a well in an area that needed clean water. And, you know, we would start the project. And we’ve said to our clients, whatever you contribute will match that. And we have built a well in Africa. And so it’s just exciting to be doing those kinds of things. You feel really good about what you’re doing. And one of the things that we do every year is we create an impact report that we send to our clients and we say, you know, these are the different organizations that we’ve supported. These are the kinds of funds we invested in. These are the kinds of companies, and it really helps them to get clarity about what we are doing that is unique.
Cassie: And they can get excited about it.
Michael: Yeah. That’s that’s great. Well, kudos. Kudos to you for for doing that. I want to ask you, you mentioned you’ve been doing this for for 20 years. Do you see are people getting more excited about this? I mean, I’m guessing, you know, I essentially what I’m asking is, is your business growing? But I’m asking it kind of in the context of does it give you reason to be optimistic about the world right now, to see people becoming more engaged and thinking more about what they’re what they’re actually investing in?
Cassie: Yes, yes, yes. So when my husband started the company at the end of the 90s, there was really one fund company that was doing this right. And so I came in the picture in 2012 and there were, you know, 3 or 4 fund companies, and now there is just getting so much momentum in you know, whether it’s you know, funds or portfolios that, you know, people are creating themselves. There are so many more resources now. So I think now is a really good time. If you’ve never thought about this, are my is my money aligned with my values? This is a great time to be thinking about it, because there are just so many more opportunities to do that than there was even in the last decade.
Michael: My last question for you, Cassie, where can folks go learn more about you and about beacon?
Cassie: Yes. Well, our website is BeaconWealth.com. That is the easiest place. And I had mentioned before a specifically, you know, for advisors, if they’re interested. I wrote a book called I Found Jesus in the Stock Market because that was really through faith based investing that brought me back to the church. And in that book, I really talk about, you know, how the questions that I had, how I overcame those, I had my own objections. And I think that’s a good starting place sometimes for people just to say how how can I be thinking about this? And is this really going to work? And, you know, just to take you through some of the initial questions that people usually have.
Michael: Perfect. We will make sure that both of those links are in the show notes for this episode. Cassie, I want to thank you for coming on. This has been a really fascinating conversation. I really enjoyed it.
Cassie: Oh, thank you, I really appreciate it.
