By James Sullivan, Head of Advisor Advocacy & Technology

Investing can reflect the culture of the times just as much as television, music, or art. Investing, conscious spending, and intentional trade have, for centuries, been a means of fulfilling our desire to express our values with our assets.

Some trace the beginnings of socially responsible investing to John Wesley’s “Use of Money” sermon from 1742. The use of capital as a weapon resulted in the coining of the term “boycott” when Irish tenants in the 1880s used financial pressure to socially and economically isolate Captain Charles Boycott.

From socially responsible investing (SRI) to environmental, social, and governance (ESG) frameworks, and now custom indexing, the pendulum of personalized investing continues to swing, reshaping how we view values-aligned wealth management.

What began as a niche interest has evolved into a common client expectation: investments should do more than perform—they should reflect the investor behind them.

From ESG & SRI to Customization

In recent decades, socially responsible investing and ESG rose to prominence, swinging the pendulum to reflect a growing awareness of child labor, climate change, corporate responsibility, and equity issues. For many investors, it was the first time their values felt visible in their portfolios. These strategies marked an important step in aligning values with capital, though often applied broad strokes.

The backswing came as market volatility, inflation, and political polarization intensified. Debates around ESG questioned whether the approach compromised financial returns or veered too far into activism.

While opinions on SRI and ESG remain mixed, one reality has stayed constant: some investors still care deeply about what their money represents. The demand for personalization hasn’t disappeared—it’s simply shifting toward new tools that offer more precision and, importantly, more potential benefits.

Custom Indexing: A New Chapter in Values-Based Investing

Custom indexing represents the next swing of the pendulum. Unlike ESG or SRI, which typically relied on prepackaged funds, custom indexing allows investors to tailor portfolios at the individual security level, creating a portfolio that is both performance-driven and deeply personal. Where ESG and SRI applied broad strokes, custom indexing offers precision. That precision delivers two key advantages:

• Personalized screens. Investors can exclude industries, emphasize causes, or align holdings with religious or ethical values—without being confined to a preset definition of “responsible.”
• Tax efficiency. Perhaps the greatest differentiator, custom indexing allows for strategies such as tax-loss harvesting at the individual security level, creating opportunities to improve after-tax outcomes in a way ESG or SRI funds rarely can.

Bringing Custom Indexing to Life with WealthSuite

At Private Advisor Group, we see custom indexing as the natural evolution of tailored investing. Our proprietary investment management platform, WealthSuite, helps advisors deliver this flexibility at scale. Through WealthSuite, advisors can access Custom Indexing solutions powered by Orion, enabling portfolios that are aligned with client preferences and designed to optimize tax outcomes. Today, custom indexing is the most popular offering on WealthSuite, representing nearly 40% of assets on the platform, more than doubling year-over-year1—proof that advisors and clients are already embracing this approach.

Meeting the Moment as an Advisor

As markets and cultural conversations shift, advisors have an opportunity to stay grounded in what matters: guiding clients with clarity and empathy to portfolios that they can own through all markets. Not every client wants a values-aligned portfolio. But for those who do, it’s more than a preference—it’s part of their identity.
Advisors can lead the way by:

• Asking early, asking often. Values and goals evolve. Build space into conversations for both.
• Educating with empathy. Not all clients understand the mechanics of ESG, SRI, or indexing strategies. Walk through the options, risks, and rewards without assumption.
• Leveraging scalable tools. Platforms like WealthSuite make personalization practical, not overwhelming. Tailored doesn’t have to mean time-consuming.

The pendulum will keep swinging. Trends will come and go. But the human desire to invest with intention will endure. Advisors who can meet that desire—through values, goals, or both—will remain indispensable guides in the evolution of personalized wealth management.

1. Data represents assets as of August 25, 2025. Year-over-year comparison is relative to assets as of August 12, 2024.

Investing includes risks, including fluctuating prices and loss of principal. No strategy assures success or protects against loss.

Socially Responsible Investing (SRI) / Environmental Social Governance (ESG) has certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.