Digital Platforms Meet Sustainable Investing


Steve Wallman, founder and CEO of FOLIOfn, became an advocate of using technology to improve the user experience for investors and advisors when he was an SEC Commissioner (July 1994-November 1997). He recognized that by upgrading the technology they were using, investors could reduce costs, trading commissions and capital gains taxes—and that was just for starters. As a member of the SEC’s Investor Advisory Committee from 2012-2016, Wallman continues to push for giving investors and advisors technological innovation.

Based on his experiences at the SEC, Wallman founded FOLIOfn in 1999 to revolutionize online investing by creating a digital platform to drive down costs for investors and financial advisors. In 2018, FOLIOfn is moving closer to Wallman’s vision of the future of investing in the United States. This year FOLIOfn will offer enterprises and advisors a suite of new digital investing tools that includes a robo platform. FOLIOfn’s new digital technology will also offer enhanced SRI investing tools that make it possible for firms to provide every client with a portfolio that is tailored to his or her values.

The plan is to marry the firm’s brokerage and custody service menu with highly modular, API-driven services that help enterprises and advisors quickly deliver a new online investing service to customers. “Our digital investing suite will give institutions and advisors of all sizes state of the art online investing tools,” said Wallman, “and the flexibility to make investment choices that best serve their customers.”

Taking The Lead With Rias And Nexgen Investing

In 2002, when Greg Vigrass joined Folio Institutional (a subsidiary of FOLIOfn), he understood how Wallman and his team had built their platform and immediately saw several reasons why it was ideal for RIAs. “Advisors can transform the way they are delivering advice,” he said, “and do it in a scalable, automated way that offers greater benefits to their clients over the long haul.” Even in 2002, Folio Institutional offered advisors dollar-based and fractional share investing as a way to give clients precise guidance with a high level of personalization. Advisors can also access building blocks to give clients more control over taxes, proxy voting and corporate governance issues.

Vigrass, now president of Folio Institutional, agrees with many of today’s wealth managers about the ability of technology to take on more of the tasks that eat up a lot of their time. Most financial advisors, on the other hand, plan to continue relying on email and phone calls for client communications. A recent Thomson Reuters global survey of 200 wealth managers confirmed these seemingly divergent expectations. Vigrass, however, does not see the survey results as contradictory.

“The digital engagement trend in financial services continues to unfold at a pace never seen before,” he said. This process of rapid change is providing advisors with tools for workflow automation, better quality assurance and more real-time results. “This trend,” stressed Vigrass, “should provide RIA advisory firms with more client-facing time to develop and sustain their value proposition versus the competition.”

When it comes to the industry-wide attention being paid to the millennial investor preference for engaging robo-advisory platforms, Vigrass believes Folio Institutional is ready. Invest Forward is a white-label robo-advisory firm recently added to the platform’s advisory choices available to RIAs. In addition to Invest Forward, several other “digital first” firms have turned to Folio for its patented trading platform. These firms are facilitating advisor engagement with clients and prospects on the clients’ terms. And according to multiple industry studies, this is one thing millennial investors are especially focused on.

Taking The Lead As An ESG Thought Leader

“There’s no question that people across the economic spectrum are more energized and engaged than they have ever been when it comes to ESG and impact investing,” said Wallman. He believes that a societal, not just a generational, shift in mindset is underway around how people use their assets, their influence and their financial voting power. Individual and institutional investors have the ability to generate good results for themselves and civil society at the same time, and this is a powerful emotional motivator.

After almost 20 years of building RIA partnerships, Wallman and Vigrass saw an opportunity to take a leadership role in the rapid growth of ESG and impact investing. In 2016, FOLIOfn acquired First Affirmative Financial Network, an RIA pioneer in sustainable investing that brought time-tested ESG and impact product solutions to the platform. FOLIOfn can now offer these investment products to other RIAs that use the platform for trading and record keeping. FOLIOfn also acquired the SRI Conference, which has been the premier U.S. sustainable investing event for 28 years.

Now that the work of integrating the diverse moving parts of the new FOLIOfn business model has been under way for a year, Wallman is optimistic about the future: “We’re in the right place at the right time to offer cutting edge technology to advisors and enterprises through a well-established RIA platform, and to expand the educational reach of the premiere ESG and Impact conference venue in the industry.”

The growth of ESG and impact investing have become sustainable in recent years through the convergence of ESG materiality-focused metrics with quantitative data analytics. Assuming this trend continues, FOLIOfn should be well positioned to help many more advisors and enterprises use digital investing technology to scale their business and meet clients’ needs.

Paul Ellis founded Paul Ellis Consulting to work with financial advisors who want to integrate sustainable and impact investment strategies for their clients.