Folio Investing: Daydreaming in 2016

FolioIt’s been two months since the SRI Conference in Colorado Springs but I’m still digesting content, like the potential of Folio Investing, and following up with other attendees.  continues in San FranciscoPortlandChicago, New York CityBoston and then Denver. Get to at least one of these conferences this year so you too can get inspired.  The people and idea are about as progressive as I have found in the investing community.

Folio Institutional

Folio-InstitutionalOne booth I checked out quite a bit at the SRI Conference in November belonged to Folio Institutional. First Affirmative Financial Network, which produces the SRI Conference, uses their platform and I can certainly see its advantages for financial advisors.

I like their ready-to-go portfolios, which offers the diversity of mutual funds with the tax advantages of individual stocks. Rebalance on your schedule, not the mutual fund’s. I also think their Commission-Free Window Trading should appeal to long-term shareowners that aim to stick with companies, rather than try to time the market.

Folio Investing

Of course, Folio Investing also has products aimed at individual investors, with the same advantages. Another thing they have going for them is their own proxy voting platform. I can’t help but think that with a few right moves, this could be the transformative vehicle not only for smart investing but also for those who see themselves as shareowners, rather than shareholders. 

Folio Dreaming

With MoxyVote, the more popular it became as a gathering and voting place for concerned shareowners, the more their costs increased. Overwhelming popularity wouldn’t become a negative factor for Folio investing because they have their own voting platform.

Maybe I’m just a hopeless dreamer. After all, the vast majority of shareholders just toss their proxies and only a handful or two ever bother to really participate in corporate governance by filing resolutions. Even at  conferences there is much more emphasis on impact investing than impact governingFolio-SRI. Still, I can dream.

Maybe if enough activists join Folio networks and demand additional services, we could get user generated broker letters almost automatically to evidence ownership for purpose of filing Rule 14a-8 resolutions. Those come fairly quickly through my current broker but I imagine the system can be further automated.

Maybe with enough activists in Folio we could have a ready database of all shareholder resolutions, not just for the largest 250 companies, like that maintained by ProxyMonitor, but for the entire market. What about a database of arguments and academic studies supporting various resolutions, no-action defenses… okay, I’m probably going too deep in the weeds for many readers.

Folio could offer a questionnaire that asks a slew of values related questions and spits out a customized proxy voting policy, so that individual proxies can be voted on behalf of the individual investor automatically.

Yes, it is Sunday afternoon dreaming as I write this on the first weekend of a new year. Who knows what’s coming in 2016? Folio seems to have a better potential lever for change than most. Governing corporations depends on corporate citizens having the right tools to both monitor and act. Accountability can’t be automated but the right tools and a more hospitable gathering place for shareowners sure would help.

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