Investing With Integrity - Robert Netzly

Jeff Talarico (: 00:01

Welcome to the Investing with Integrity podcast. My name is Jeff Talarico I am your host. Today, we are honored to have Robert Netzley, the CEO and founder of the Inspire Investing family of companies, as our guest. He is responsible for strategic vision and keeping the firm focused on its mission to inspire transformation for God's glory by empowering Christian investors through biblically responsible investing, excellence, and innovation.

, I'm sorry, from Inc.: 5000

Growers Across America for: 2024

on in Carmel, California from: 2008

Robert and Lisa are passionate about classical Christian education and enjoy supporting their vibrant local homeschool community. Robert and his family worship and serve at the King's Congregation in Meridian, Ohio. Robert, welcome to the show.

Robert Netzly (: 02:05

Hey, pleasure to be here. Thanks, Jeff.

Jeff Talarico (: 02:07

You're very welcome. So I'm going to start off with you the same question I ask every guest. What is something interesting about you that not many people know?

Robert Netzly (: 02:16

I don't know if I'm that interesting, we'll see. You mentioned the black belt thing. That's usually interesting to people. That was my first job in high school, actually, was teaching martial arts. I always wanted to be a ninja growing up as a little kid, and then my mom got me for Christmas one day, signed me up into martial arts when I was little, and ended getting my black belt and starting to teach. So that was lot of fun.

Jeff Talarico (: 02:41

Okay. Why don't you tell us a little bit about your journey in the financial services industry.

Robert Netzly (: 02:47

man, that was, where do I begin? I went to school to be a fourth grade teacher actually, did not end up being a teacher, obviously, here I am. But a long winding road to the financial services industry. I dropped out my junior year of college, made, after making $96,000 one year working part time on the weekends selling alarm systems door to door as a college student. And like, well, why am I trying to be a teacher?

You know, so it went in kind of business stuff, sales stuff, and then ended up in youth ministry. So I got married, my wife and I lived in this little hand-built cabin our pastor had made after he got saved in the Jesus movement in the 60s up in Berkeley on their little family farm and kind of living barefoot for Jesus on the side of a mountain, literally. And I do youth ministry in all different sorts of sizes.

for several years, started having babies and needed more money. I went back into sales, selling cars at a Volkswagen Mazda dealership, because to pay the bills, well, we did a ministry volunteer. And then in 08, that dealership went out of business. And it's kind of really a sudden thing. And that's when I started looking for a more family-friendly schedule. We had a couple kiddos.

So I figured let's go to try to get a job at a bank, nine to five Monday through Friday and applied to a bunch of different positions. Ended up getting hired at Wells Fargo Private Client Service down in Carmel as a sales assistant in their investment department. Knew nothing about the investment industry at that time and took to it really quickly, got licensed, all that sort of thing and kind of the rest is history. So that's how I got into the financial industry, which is funny because math and.

public speaking were like my two worst subjects in school forever. I would always get my worst grades in math and I was scared to death to talk in front of any sort of group, let alone, I mean people in general scared me. I don't know. And here I am, you know, God has a sense of humor. I just talked to lots and lots of people about money all day long.

Jeff Talarico (: 04:54

All right, so let's then get to the meat of this. What does biblically responsible investing mean to you?

Robert Netzly (: 05:00

Whatever you do, whether you eat or drink, whatever you do, do it all to the glory of God. That's what 1 Corinthians 10.31 tells us. And then we've got innumerable other scriptures that really specifically speak in the finance, but just like our life belongs to Jesus. And if we, whether we realize that or not, like it does. And so does every dollar, so does every...

Stock, every mutual fund, everything belongs to God and is meant to glorify Him. so biblically responsible investing is our effort to make that truth a manifest reality in our financial portfolios. So if Jesus owns the money in our stock portfolio, our mutual funds or ETFs or whatever else, 401k, IRA, what would He put in there? If He was really the Lord, what would He put in there?

and how do we, know, what would he want to make money from? What would he not want to make money from? What would bring him the most glory? I mean even if it's a tie between, you know, maybe there's two things that are like good and better, like not even just immoral, maybe we talk about some of those things like abortion drugs, pornography, etc. that we want to kick out of portfolios, but like should we be looking for the most God-glorifying things to put into the portfolio? Not just avoid the bad necessarily, but

farther along than that, right? And when you think about the Christian life, when someone asks you, does it mean to be a Christian and glorify God in your life? The answer shouldn't be just avoid sin at all costs. Like, well, obviously that's part, that's a big part of it, but that is not the end all be all of Christian life. It's to glorify God and enjoy him forever. And so avoiding sin is, is part of that. It's like table stakes. But then we have all these other decisions that we get to make and not, you know,

Jeff Talarico (: 06:29

chant.

Robert Netzly (: 06:49

Everything is permissible, but not everything is beneficial. Like what are those best things, those most God glorifying things? So here at Inspire Investing, we're really interested in, yes, avoiding sinful companies that are, you know, just doing all kinds of heinous things in the world. But then where do you find the most God glorifying companies?

to put money into and then in that process as investors, how do we shine our light as bright as possible to help inspire change in the world's largest companies to help speak biblical truth to corporate power. So that's kind of the framework that we operate at from and inspire investing.

Jeff Talarico (: 07:26

And now why don't you talk a little bit about the suite of ETFs that you have. I believe you're up to nine now.

Robert Netzly (: 07:32

Yeah, that sounds about right. Yeah, we've got some number like that. We've got, yeah, when I first met, we had zero. So it's just...

Jeff Talarico (: 07:35

I so. I think when I first met you, you had three. So.

Robert Netzly (: 07:43

It's amazing we have any by God's grace, really with my background. But the Lord has brought us some wonderful people and there's a movement he's doing and it's amazing to see how he's working. So yeah, from those early days with just on a wing and a prayer, getting a couple, a couple three funds out on the New Year's Dock Exchange way back when in 2017 when we first had our first launches to now, you know, a decent fund family and growing.

Our ETFs are primarily known for being low cost, index based. You know, when we first started launching ETFs, that's why we did this. was because there wasn't anything in the low cost index based space. If you're a Christian investor, faith based investor, we had some actively managed mutual funds and such, but there was nothing in that low cost index based space. And that was a hindrance to our practice.

That was a hindrance to many other Christian financial advisors and investors that we had met and it was obvious that no other company was interested in solving that problem at the time and so we decided to lean into that. So we have, know, like for example our newest fund, PTL, praise the Lord, it's a US large cap ETF. It was just launched a little over six months ago.

And it's already at $225 million. It's been remarkable to see how quickly that fund is growing and attracting assets. It's the 500 largest US companies that pass our screening. And market cap weighted, rebalanced annually. So it's really efficient. And the headliner, it's only

nine basis points, 0.09%. It's actually cheaper than the world's largest ETF. One of the biggest S &P 500 ETFs, actually cheaper than the secular alternative. And so for the first time, faith-based investors have truly gone toe to toe, or will go toe to toe on fees and with the world's largest secular funds.

Robert Netzly (: 09:45

And we don't invest in any of the Mag 7 or any of you know, the Amazons or Microsoft or Netflix's of the world that are involved in all the woke to EI activism. And it out we don't need to invest in them to really, to do well financially. So that's it. It kind of gives you a flavor. And then our other funds just fill different niches, you know, small cap, United U S or international large cap, fixed income, et cetera. So we have a wide array of diversified portfolio.

Jeff Talarico (: 10:11

I'm glad you brought up the topic of expenses because a lot of people look at this special niche that we do, this this BRI movement, and they think that it's always going to be more expensive. Now, there are some things that are with the research that you guys have, the research that I've used. And with that, yes, there might be additional fees. But with companies like you being able to cut those fees like that, it makes a huge difference in the impact of a client. So if you have

customers of your own, how do you handle that fee compression discussion with them?

Robert Netzly (: 10:45

Yeah, yeah, we want to be the no compromise best option for investors, whether you're faith based or not. Our great vision would be for non-Christians to choose an explicitly Christian fund because it's better, despite the values, right? I not only do we Christians to invest because it's the right thing to do, we also want non-Christians to be so like, this is just a better fund.

You know, and we're going to invest in this just like you might buy Amish furniture because hey, they do that really, really well. I don't want to drive a horse around all day, but I really like their furniture. So that's our goal, right? And it's a long road. mean, we're nowhere near the size of a Vanguard or BlackRock to get their sort of scale. But it's important. Now there is, that said,

you know, versus like better, like in Proverbs, better is a little with righteousness than great gains with injustice. So if there was, if there was a required trade-off between lower financial performance or choosing to invest in a way that glorifies and honors God, I mean, that sounds like a ridiculous question. Well, of course we got to, you know, invest in the way the honors God, but oftentimes we don't really put it down to that, that dichotomy. But it really is true. If,

If the only option, the honored god, maybe more expensive or returned less or whatever, really what kind of a price does our conscience have? Like how much is that? How much does it cost for me to buy off your conscience before you were able to invest in something that violates your deeply held beliefs? Hopefully there's no price tag that you would ever put onto that.

We really have to think as Christians and force ourselves to look at the truth of a portfolio that's money off abortion drugs. There's pornography sales in a portfolio. Those are real problems. And how much money does God want his people earning?

Robert Netzly (: 12:48

from the sale of abortion drugs? I think the answer is zero. you know, so come into grips with that. I think we should be willing to make sacrifices if necessary. We do that in other parts of our life. We sacrifice many supposed, you know, pleasures or freedoms or whatever you want to call it to live a life that is honoring a God. The world does a whole lot of things that a dedicated Christian is not going to go get involved with, either because it's inherently sinful or it's just not wise. And so why would our investing be any different?

shouldn't be. So I'd encourage investors in that way. Now at the same time again, we are absolutely dedicated to the truth that there is no required trade-off. Good values and good returns don't have to be mutually exclusive. There's no requirement by God's grace, but if there was, then I think we should be willing to make that trade-off. It's where I help people think about things.

Jeff Talarico (: 13:45

So then how do you explain to the believer who, yeah, I get it, but you know, I've got to get this money. It's got to be, you know, so much by retirement and it's just not proven enough yet. How do you handle something like that?

Robert Netzly (: 14:01

I'd say, define proven enough. How would we prove that to you? And then I would prove it to them because the fact is it is proven enough. mean, you don't need a 55-year track record to trust something. So that's my tongue-in-cheek response. But I would sincerely take that question and it's real. What that is, is there's a fear.

expressing is a fear. That I have a fear that I'm not going to have enough money to retire if I invest in a way that is, you know, aligned with biblical values. If I choose to invest differently than the world, I am afraid that I'm at risk of not being able to survive in retirement in the way I want to survive.

True false, Mr. Client? Yeah, mean, actually, well, yeah, is my concern. I have a fear. Okay, so that's what we're really talking about, right? So what does God tell us about fears in life? Right, trust Him. Is your trust in your portfolio? And let's just take the biblical investment out of it. Like, let's just say it's mutual fund A or mutual fund B and they're both secular or whatever, right?

Like are we really trusting in the portfolio? I hope not. I hope you're not trusting in me as your advisor. That's a burden I'm not able to bear. God is your provider. God is your provider. And the day before you retire, the stock market might fall out from under you and it doesn't matter what fund you're in. Where's your hope? That's where we take a Christian. And that's it. And if our hope is in Christ.

then yeah, we want to make prudent investment decisions, right, as good stewards. But what is a prudent investment decision? Is it only returns and fees? That's a worldly answer. If those are the, if those, you know, there's lots of things that even the world doesn't invest in.

Robert Netzly (: 16:03

because of morals, even though they make more money. Like you can make a lot of money slinging crack on the corner, investing in, know, prostitution rings or whatever other sort of things that are out there. People make a lot of money doing that. That's why some of these high profile people you hear around the news go into prison. That's why they did it because it was making a lot of money and they also had a lot of, you know, other problems that went along with that. But we're not going to do that, right? Even if it was legal. What if it was legal to invest in a prostitution ring? Made a lot of money.

Would you do it? I hope not. Because it's the wrong thing. So you would be willing to forego financial performance because of moral reasons. That's very obvious. I don't want to do that. What about selling pornography? What about selling abortion drugs? Just because the ticker symbol on a page, maybe it feels less visceral and less real than like when I say investing in a prostitution ring. But is it really any different?

Like I'm putting money into an investment, into a company that's paying me as an owner from the sale of abortion drugs and pornography sales and whatever else. It feels more distant, but is it any really different? Maybe that's just something that Satan has used to lull us into complacency, to allow him to have his way with God's money and use all that to influence the world away from God's kingdom. And he's doing it with the money of Christians.

What a tragedy. And so that's what we're passionate about is bringing this realization to the people of God and saying, know, not in a judgmental finger pointing kind of way, but man, church, like there's this huge problem, a huge opportunity to honor the Lord in a way that could have such an enormous impact in the Lordship of Christ being

you know, honored in so many ways and shining a light and being salt and all these things as investors, it can have a huge impact. Or we can just abdicate that over to Satan s Henchmen in Wall Street and let them make the decisions. Like those are our options. So, you know.

Jeff Talarico (: 18:16

You know, I don't know if you remember the conversation you and I had, it's about seven years ago when I blew up my practice and decided to go all in for BRI. And every one of my clients except one made the move. And I called you going, how did you deal with this? Because of all people, the one that didn't make the move was a pastor. And you said you've experienced that yourself.

and never, I can't understand that to this day.

Robert Netzly (: 18:47

I know it's a little puzzling, it's a little concerning. They're going to stand before the Lord just like all the rest of us. And it is interesting that the people that you think, they're going to really get it, whether they're a pastor or whoever, but you're like, this person, they're going to get it. Oftentimes are the people that don't get it. And Jesus said, where your money is, where your heart will be also, there your heart will be also. And there's something that gets...

you know, exposed when it comes down to putting money, you know, moving money, whatever kind of financial decision, whether it's an investment or a donation or where you spend money or whatever. And there could be a lot of reasons that a pastor chooses not to do something. And it's basically the same reasons that other people decide not to do anything. Oftentimes they hear from pastors, they just kind of don't understand the financial worlds. They're leaning on the advice of some other person.

you know, and that's just it. Or there's a lot of fear there because they already don't make a lot of money and there's sort of a lot of pastors are kind of had this low-level anxiety all the time about finances. And so doing something different is scary. Tend to be more, you know, conservative in the sense of just slow moving like.

slow adopter of new things and this sounds like a new thing, know, you know, this is kind of scary to them. I think there's a lot that goes in there regarding just kind of the pastor type of person. But and then you got other pastors who just love it and preach about it, you know, and they're telling all their congregants, I mean, don't invest in abortion drugs. And so there's definitely a gamut. But it is surprising sometimes that we kind of think, this guy, it's not that guy.

Jeff Talarico (: 20:31

You'll get it.

Robert Netzly (: 20:34

It's also surprising the people you think, this person, never in a million years, and they are the most fired up person about. I remember this one call we got very early on, phone rings, pick it up, and the first words out of this lady's mouth were, I hate the church, is that going to be a problem? If I do business with you, I'm like, well.

I mean that will be a problem eventually not with me, but I mean some it will be a problem for you It's eventually you know, but I'm like, you know, hi, I'm Robert. What's your name? Anyway, she was raised, you know, like a Mormon context. I had a lot of church her to walk away from you know, was she her understanding of what like church and God and all those sort of things, but she was pro-life and she didn't want to invest in abortion and she became a client and

Jeff Talarico (: 21:18

Wow.

Robert Netzly (: 21:20

She referred people to us. So, I mean, the people you think are so far off. We've had openly LGBT couples as clients, and that's strange, we think.

but they just respect that we do a good job for them. We screen out gay activism from our portfolios. They realize that. And then we've also had folks who in the LGBT community decide not to be clients of some of our advisors, but then they send us referrals because they know people who are Christian and they're like, well, yeah, you actually, you should talk to these guys. Like they just, they, you know, recognize there's an integrity there and they don't agree with our values, obviously, and we don't agree with theirs.

But there's still like, it engenders respect when you don't just, you know, put your leg under a bushel. And oftentimes some, you know, it's interesting to see what God does with that. yeah, those discussions are, you never know what God does. That's the thing.

Jeff Talarico (: 22:20

So one of the main things I really wanted to talk to you about today is shareholder activism. I know that you and your firm are active in getting companies to change. Why you talk a little bit about that and how it works for you.

Robert Netzly (: 22:34

Yeah, something we stumbled into years ago where there was, you know, one of the earliest times this kind of fell into this was with Costco. Costco was a holding in one of our portfolios and we noticed they had started getting involved in sponsoring some LGBT, gay pride parades and things of that nature. Like three different instances, I think, if I remember right, one year.

That was a problem for us. And so we were like, well, let's just send them an email. I called Investor Relations, sent them an email. Just let them know this was concerning to us, that we'd have to divest. that was that, as far as I was concerned. Two hours later, I got a phone call back from the chief financial officer at Costco. He's like in the airport, getting ready to get on a plane.

He's like, you know, I got this message and like, what's this about? And just kind of confused. And I was shocked he called, you know, we were not a big firm. We still aren't a very big firm compared to the very big firms out there in the world. But back then we were definitely not. And so I just explained we're Christian investors, we represent Christian and, you know, investment clients. And here's what we see. And that's problematic to us for these reasons. This is our money as shareholders and you're donating it to

you know, this cause that's deeply antithetical to our deeply held beliefs. And, you know, can't you just kind of stay out of it? You know, don't pick sides in a social, divisive social issue. And he was respectful and was like, that's interesting, you know. And so let me look into that. We had this dialogue for weeks. Ended up him doing, making a company-wide policy memo that they did not, no donations to

socially controversial issues or something like that, some phrase, know, including gay pride parades, including, you know, ostensibly other things, but just give them to the little league, right? Just Red Cross, you know, just make, do things like that. And so it was wonderful. said, win, like we were not expecting this. And we said, well, we should do this more often. And so we started doing that more often. And by the grace of God, we continued to have

Robert Netzly (: 24:50

you know additional stories like that with some of the world's largest companies. We've got a shareholder resolution right now in an apple. I the world's think it's the world's largest company today they keep their trading places with Nvidia back and forth I think but you know about how where they're giving their money about having them be transparent. We can't ultimately tell them where to give or not give but we can require them to be transparent.

about what they're doing with shareholder dollars and some of the organizations they're giving to are probably very distasteful. We have information on some of them. Their investors deserve to know this information, especially in today's day and age when the trans activism and things have been such a huge, whether whatever side you're on or that issue or not, target stock got pummeled, Budweiser got demolished. These are real financial risks.

with companies taking sides in these issues. you know, so Apple giving money to, the SPLC and like other sort of radical activist organizations that really have extreme leftist radical agendas. Even if you're in favor of those agendas, you may not want your investment companies to be involved in those agendas because it might hurt them, and hurt your portfolio. And at the very least it is a fiduciary obligation to tell your investors.

the meaningful material risks of investing. And if you're going to be an activist these days, that's a material risk. So that's like an example of one of the things we're doing right now. We have other similar resolutions with big companies. We're pushing with Costco, Walmart, Albertsons, McKesson, Kroger's right now to keep abortion drugs out of the pharmacies. So we started a petition on that and have sent letters and we've gotten

other asset managers to sign on. We've gotten, I think, over 14 state financial officers, including treasurers and other officers, to write letters and send to these companies to encourage them to stay out of the abortion business. It's just not even worth it from a business standpoint. And the risk that you introduce by going into that from a legal perspective, as well as just a social brand blowback. So we're at the leading edge.

Robert Netzly (: 27:14

of that fight and others to come.

Jeff Talarico (: 27:19

That's awesome. That's awesome. So let me ask, do you see the industry heading in the next five, 10, 15 years?

Robert Netzly (: 27:27

Well, what we're seeing is more and more investors having their eyes opened to this idea in general, right? This concept that we can think biblically about what we own.

and be active, proactive stewards of those companies, of those shares, and vote proxies in a way that pushes companies towards biblical values, engage in activism like we're talking about and shareholder engagement, and even just be mindful about where we should be making money and where we shouldn't be making money as Christians. And the message that sends to Wall Street, the kind of business they choose to do or not.

Like, should we sell abortion drugs or not? You know, if no Christian is anywhere going to invest in a company that sells abortion drugs, maybe that changes Costco's mind. You know, maybe that changes the calculus. So I think that's just going to continue to explode in awareness. And the results of that are we're seeing more companies; asset management companies launch more products.

to really build out this industry of a robust faith-based investing industry with a lot more selection than we ever had before. There really is a growing, solidly growing industry of high-quality investment products from a number of managers. And that's exciting to see. We're seeing more dollars flow into that space and we're seeing more influence with these companies as a result. So those are just a few of those examples. I think the flip side of that is you're also seeing

advisors who maybe they're Christian advisors, you know, I hear about this often, you know, hey, my advisor is a Christian, but he's never talked to me about this. And, you or I did talk to him and he's not really interested or she's not really interested. Well, those people are going to lose clients, frankly, you know, and if they're secular advisors, you know, in fact, there's more secular advisors who are willing to help their Christian investors screen their investments.

Robert Netzly (: 29:20

then some of these Christian advisors who for whatever reason kind of refuse to do it, you know, and it's just sort of odd, you know, if your client must have...

Jeff Talarico (: 29:27

Well, some of them work for firms that that can't even get the product on the platform.

Robert Netzly (: 29:31

That's true, some of them are. they're in a rock and a hard place and they just got to make some real life choices there. And is this the place, really, is that the firm that you need to be at, Mr. Advisor, Mrs. Advisor? Yeah, exactly, me too, right? So I think you're going to see more of that happen. And just the movement's growing, so praise the Lord.

Jeff Talarico (: 29:42

There's a reason I left my friend. There's a reason I left.

Jeff Talarico (: 29:52

I know you got to go in a few minutes. So just one final thing. If there were three people dead or alive that you could talk to, who would they be? Why? And you can't say Jesus.

Robert Netzly (: 30:02

Yeah, obviously. So, man, it's a hard question, but some of the people that come to mind would be, you know, I don't know, like Martin Luther, who seemed like probably a really interesting guy to hold a conversation with. Maybe another church father like Augustine or something like that. The Apostle Paul. know, Sunday School answers, I guess. But it'd be really interesting to ask them some questions.

Jeff Talarico (: 30:30

Okay. All right. So is there something that I didn't ask you that I failed to ask that you're just dying to say?

Robert Netzly (: 30:31

Yeah.

Robert Netzly (: 30:37

Man, it's been a great conversation. I would just encourage everybody listening, like if you haven't just taken that first step and just had the courage yet, perhaps to just peek behind the curtain of what's actually inside your 401k, IRA, mutual funds, ETFs, investments from a biblical values perspective, do that. Don't try to make the decision whether you're going to make any changes yet, but just look and see what's there.

your portfolio is important. And so you can look at inspireinsight.com. We've got a free tool that can use. know Jeff, you can help people with that too. Just type in a ticker symbol and see what's there, pop the hood. And then make a decision with that information. Be educated, but just don't be ignorant. That's the thing.

Jeff Talarico (: 31:27

There you go. Well, Robert, thank you again for your time. Hope to see you in February. Kingdom Advisors, don't know if you're going to be there or not, but I hope to see you there. If not, thanks again for being on the show. We'll talk to you soon. Bye bye.

Robert Netzly (: 31:34

Yep.

My pleasure. God bless.