So you have money invested with Vanguard, BlackRock, State Street, or Fidelity, and you recently heard that these Asset Managers have failed to utilize their power as large shareholders of publicly traded companies to address structural racism.
You don’t want your money held at, or managed by a Company that is supporting voter suppression and other public policies that cause great harm to communities of color. After all that we have learned about racial injustice in American society, some companies are still, to this day, voting to approve all-white corporate boards of directors, or blocking shareholder efforts to improve corporate disclosures of lobbying activities and political contributions.
You want the financial institution where your money is invested to welcome racial diversity on its board of directors. You want the financial institution where your money is invested to vote IN FAVOR OF, NOT AGAINST shareholder proposals that would require racial equity audits to improve issues of racial justice in a company’s operations and/or governance, including board diversity, workforce issues, pay disparities, etc. You want to know that your views on racial justice are not in opposition to those of the financial institution you’ve entrusted your money to.
Thanks to the great work of a coalition of activist organizations, including SEIU and Color of Change, a newly released report has made the public aware that, despite making statements in 2020 after the killing of George Floyd and protests calling for racial justice, and despite acknowledging the existence of systemic racism and promising to address it, all 4 asset managers mentioned above are actively working to block racial justice efforts and preserve the status quo.
Well, guess what? It’s your money and you can walk (i.e. take your business elsewhere) with a few steps. First, decide which of the following options is right for you:
- Option A) Divest from mutual funds, index funds and ETFs managed by Vanguard, Black Rock, Fidelity or State Street.
- Option B) Move your account away from one of these financial institutions.
- Option C) Do both!
If your account is invested in publicly traded funds (mutual funds, index funds, or ETFs) managed by BlackRock, Vanguard, State Street, or Fidelity, and you want to divest:
If it is an account like a regular brokerage account or IRA – then you can easily trade to sell out of those funds, and reinvest the funds in similar areas of the market with a different manager.
- Not sure how to reinvest your money after selling out of these funds? Utilize information from places such as Natural Investments Heart Rating, As You Sow, and Adasina Social Capital’s Racial Justice Impact Data Set.
- If you are working with a financial advisor, you can ask them to help you with this.
If your account is an employer-sponsored retirement account like a 401(k) or 403(b), you won’t be able to easily move your account, but there might be some other investment options that you can change in your account. Check with your qualified plan administrator for other investment options.
If you are ready for Option B or C, follow these steps:
Step 1: Identify another custodian to hold your account
In our opinion, none of the major financial institutions has a perfect record on racial justice, but some (like the big 4 mentioned above) might be causing much more harm than others in perpetuating systemic racism than others just by their sheer size and power as large shareholders in publicly traded companies. Finding the perfect custodian may be difficult, but a groundswell of clients who are moving their money away from the above-mentioned managers will send a strong signal. You can go online or call the financial institution and ask for more information about its policies and actions around racial justice.
Step 2: Open a new account at the custodian/financial institution that you wish to move your account(s) to
Most likely you’ll be able to open an account online in 10 minutes. Who knew it could be so easy, right?! Be sure to open the same account type that you currently have (an individual or joint brokerage account, a retirement account, a living trust account, etc….)
Step 3: Transfer Your Account
Follow the steps online or talk to your new custodian’s customer service department about how to do a “full account transfer” (better than withdrawing funds from an account because there could be tax consequences and penalties).
Step 4: Spread the word & Disrupt!
Let others know about the #InvestedInRacism campaign and what you are doing to hold these investment managers accountable. Together we can send a strong signal that corporate woke-washing will not be tolerated!