Innovation

In 2013 Angela and Marshal Barbash started Revalue. Revalue is an RIA (Registered Investment Advisor) firm that approaches financial planning in an innovative way. Firstly, they do this by making their services accessible to clients of all economic standings by providing financial planning services on a sliding scale with no account minimums. It is important to Revalue that no matter how much the client is paying they receive the same level of service. The only place there is not parity is for individuals whose wealth, generally high net worth individuals, require more legal or financial assistance to manage. In turn, those clients are asked to pay a higher base rate than other clients. In most RIA firms the fee for managing assets under management (AUM) decreases after $1M or $1.5M. At Revalue the AUM management fee does not decrease until $3M or more. By not decreasing fees sooner Revalue can use that extra money to make their financial planning services accessible to as many people as possible. As this practice is less common in the finance industry Revalue is transparent with all clients about the purpose of their fee structure, in turn attracting values-aligned clients. To make sure that Revalue stays a viable business when they balance their books they ensure that the client base is meeting their revenue needs. If not, they will focus on onboarding more high net worth individuals and may pause on accepting clients that can only pay a lower fee.

Another part of Revalue's innovative solution is to focus on local investments that move money from Wall Street to Main Street. Local businesses are proven to create more jobs and wealth for communities while providing investors with comparable returns to Wall Street. At Revalue advisors proactively offer local investment options to their clients. Meaning, that clients can invest their money in their local communities, supporting community development and climate resiliency.

Finally, a tenant at Revalue is empowering their clients to do their own financial planning. Through working with advisors individually or in classes offered through Revalue, clients can learn skills, like performing due diligence, to meet their financial planning needs. In turn, providing their clients with skills and tools to reduce reliance on advisory services, making financial planning accessible to all.

Inspiration

From 2000 to 2010 Angela worked with a mentor who taught her about financial systems with a critique of capitalism. At the same time, she and her husband lived in a neighborhood that faced poverty and violence. By 2008, the year of the Great Recession, Angela was already an investment advisor and saw her peers responding to this crisis by focusing not on how they could help their clients, but on what they could get out of the crisis. At the same time concerned investors were reacting to the crisis by asking questions like, How can I diversify off of Wall Street? How can I invest in climate solutions? In 2011, disheartened by the callousness of the financial industry, Angela decided to take action to help investors find another way. As such, she worked for a number of firms, trying to integrate conversations about resiliency, critiques of the market, and creating alternatives for investors. Unfortunately, she couldn’t find a firm that addressed all of these topics. She even mentioned that at one firm she was told she couldn’t talk about local investing at all. As such, frustrated she and her husband decided to start Revalue.

Overall impact

With a focus on community impact, Revalue is part of the finance sector's impact investing arm. Traditionally, impact investing considers environmental, social, and governance (ESG) metrics as a risk management strategy, instead of a strategy to create positive value creation. For example, if a company bottles water in an area prone to drought, a traditional impact investor would say this is an unsafe investment, as the chances of drought in the area will likely increase due to climate change. In turn, investors should not put their money in that company. Instead, by putting a positive value creation lens on the situation, the advisor would look for companies that are creating the solutions needed for an area prone to drought to survive and thrive. Then the advisor would guide their clients to invest in those businesses, in turn supporting those solutions. Revalue thinks of positive value creation as resiliency. That by making financial planning services available to all, bringing more wealth into local communities, and empowering everyday citizens to control their own financial planning, we are building people and communities more able to weather the storms of social and climatic catastrophe.

More broadly the impact investing sector has been trying to figure out how to quantify its impact but, as Angela noted, similarly to the impacts of philanthropic investments, the evidence of impact is qualitative. As such, the evidence that suggests impact has occurred at Revalue can be found in client testimonials and stories. As noted in a Revalue blog post, “ What I’ve Gained in the Revalue Cohort,” a cohort member notes, “Revalue understands that your values matter just as much as the money you are putting alongside them. It’s empowering to have an investment strategy aligned with our values,... and an organization that genuinely cares about helping us manifest both.”

To support both their mission of moving money to Main Street and to empower people to control their own financial planning, Revalue has hosted a mock pitch and investment decision experience for community members to get their feet wet in local investing and the due diligence process. Revalue notes that, “over 400 investors from all experience levels have participated in this due diligence role-playing simulation.” As Angela said, "Over the last 50 years we’ve managed to invest over 99.9% of our wealth outside of our communities. Shifting even a tiny percentage as part of a well thought out investment portfolio by everyday citizen investors can be game-changing for communities.” This quote highlights the impact of their work and the importance of this knowledge to the general public.

Business benefit

Revalue's work has not only benefited community members and society but, has benefited Revalue as a firm. Some examples are employee satisfaction and retention. Every year Revalue does a 360 review of all the staff including leadership. In the review three key questions are asked, Do you feel like you have autonomy? Do you feel like you are on a path to mastery? Do you feel like you are part of a bigger purpose? Autonomy, mastery, and purpose have been shown to be the three key factors in maintaining motivation at work. Angela noted, "Since inception, all of the staff have answered yes to these questions." In turn, it is no surprise that employees have stayed with the firm, they have attracted new talent, and have grown their team to eight solid members. Staff retention and new talent attraction, during what is being termed the Great Resignation, is an achievement that saves Revalue time and money.

Another example of how their work benefit's the firm is their resilient client base. As noted earlier Revalue aims to provide services for people of all economic standings. The revenue for most traditional RIA firms is based on AUM from high-net-worth individuals. Revalue's revenues are split 25% low to middle-income and 75% high net worth clients. In line with modern portfolio theory, which is the principle that you reduce risk and increase returns through diversification, Revalue sees having consumers across the income spectrum as helping the firm to diversify their client base, in turn making them a more resilient business.

Social and environmental benefit

Traditional impact investing firms benefit society and the environment by investing their client's dollars in financial products that screen out problematic assets, like fossil fuels while offering market-rate returns. In turn, these investments divest from environmentally problematic companies and allow investors to align their money with their values. While Revalue embraces divestment, since its inception, they have been interested in going beyond this industry practice. For example, early in the history of Revalue Angela and Marshal were interested to discover the ways investors, especially nontraditional investors, were being served by the finance industry. As such, Angela reached out to nonprofit financial service organizations to see what was available for low-income investors and if there was a disconnect between them and for-profit financial services. What she found was there were financial coaches and financial planning services that were available at low cost or no cost but there was also a wide gap. There was a disconnect once people got to a place of financial stability, were able to invest, and in need of more complex financial advice; they couldn’t afford the account minimums or fees associated with for-profit firms. This left people with basic financial planning knowledge, unable to mature their financial plans. In turn, Revalue's goals to provide financial planning services for people of all socioeconomic standings, provide local investment options to their clients, and teach people how to do their own financial planning, supports community resilience, cuts down on the carbon footprint of businesses, and gives access to financial planning services to vulnerable populations.

Interview

Angela Barbash CSRIC, Co-founder and CEO