Paradigm Norton and Tribe Impact Capital: Investment partner case study

Paradigm Norton (PN) Financial Planning partnered with Tribe to deliver a bespoke range of model portfolios for its clients. This case study provides background on PN’s thorough due diligence process, why they ultimately chose us as their investment partner, and any advice they have for other institutions looking to further integrate sustainable investing.

Why did PN select Tribe as their investment partner? What was your due diligence process, and what made Tribe stand out?

Selection process:

Our process began with a long list of thirteen firms, built from our network, expert consultants in sustainable investment, and industry events. We assessed each firm’s commitment to sustainability, assets under management (AUM), approach to impact and financial returns, values alignment, portfolio costs, and reporting — seeking to define what each meant by an “impact-led portfolio.”

This allowed us to narrow the list to five firms, which completed a detailed questionnaire and engaged in deeper discussions about Sustainable Development Goal (SDG) alignment, commercials, and the level of influence we would have.

With the help of an independent external consultant, we conducted both hard and soft data comparisons, looking at stewardship, engagement, and portfolio exclusions, and met with each firm for several hours. We consulted our network for feedback, reviewed their methods for calculating impact reporting, and considered traditional principles such as risk and return.

From this, two firms stood out as strong potential partners. Both presented to our investment committee, after which we drafted an investment mandate and received initial portfolio proposals. These were debated in a further committee meeting before our final vote.

Why Tribe:

Tribe ultimately stood out for their bespoke portfolio tailored to our mandate, their high conviction focus on impact, and their responsive, relational approach to partnership.

Their track record of innovation, deep alignment with UN SDG revenues, and rigorous due diligence process gave us confidence, as did their expertise in impact reporting with robust data.

As a fellow B Corp, they shared our values, while their favourable share classes and strong impact-led brand supported our goals.

Tribe’s strong grasp of the evolving regulatory landscape, including the UK Sustainability Disclosure Requirements (SDR), was also an important factor in our decision-making. Their ability to integrate this understanding into the design and reporting of the portfolio gave us confidence that we would stay ahead of regulatory requirements.

We were impressed by the leadership of team members like co-founder Amy Clarke, who plays an active role in the FCA’s Advisers’ Sustainability Group, is co-chair of B Lab UK, and is a respected voice in sustainable investment. Combined with Tribe’s extended track record and commitment to thought leadership, these qualities made them the partner best aligned with our vision and needs.

How does Tribe’s investment approach fit with your ethos and client base?

We found that Tribe was the most willing of the model portfolio service (MPS) providers to attempt to maximise the SDG alignment of portfolio funds, which matched our ambition to push for deep alignment. Tribe was open to accommodating our asset allocation preferences into the design of a bespoke portfolio.

We also place great importance on deep due diligence of fund managers and maintain a high threshold for fund selection, so Tribe’s rigorous approach in this area was both reassuring and a strong fit.

Similarly, our focus on stewardship and engagement was well aligned with Tribe’s own emphasis on these activities, and we appreciated the research and dialogue that they conduct with asset managers about their stewardship activities.

Another area of shared focus is additionality through investor contribution, and we valued Tribe’s intention to collaborate further here. We admired their past collaboration with healthcare infrastructure company Assura, which assisted in them becoming the first FTSE 250 (Financial Times Stock Exchange 250) certified B Corp. We look forward to building on our existing work together in the UK Wealth Managers on Climate group. Finally, because we hold very high standards for how we serve clients, we appreciated Tribe’s professionalism and the confidence they gave us that they share our commitment to excellent client service.

What benefits has PN seen from working with Tribe?

Working with Tribe has brought us a number of benefits. From the outset, we engaged in a considered two-way dialogue about the investment mandate and fund selection, which resulted in a portfolio that truly met our objectives. This collaborative approach continued with the formation of a sub-investment committee to regularly review the portfolio.

We have also benefited from extremely responsive support, particularly from Chris Toy, who coordinates communication with the wider Tribe team. During the rollout of the portfolio, we held weekly calls that ensured everything stayed on track.

Tribe continues to support us by designing and delivering bespoke training sessions for our advisers, shaped by our guidance on their needs.

Beyond training, Tribe assists with client meetings and questions, including attending meetings in person when required. They provide valuable support in analysing impact data for our bespoke portfolio impact reporting.

We further appreciated Tribe’s help with the target market statement and other supporting documents. Most importantly, initial client feedback has been encouraging, with many clients embracing the Paradigm Norton Intentional (PNi) portfolio range as one that meets their needs as investors.

What advice would PN give to other firms looking to integrate sustainable investing?

We found that we needed to make two key business decisions. First, we needed to determine whether we had the resources to create and maintain an SDG-aligned investment portfolio in-house, or whether a better result would come from partnering with a specialist provider (e.g. a discretionary fund manager (DFM)) with expertise we could draw on. And second, whether a standard model portfolio service (MPS) portfolio would be sufficient, or if we needed to create a bespoke portfolio.

When conducting due diligence, there are countless metrics you could compare between DFMs, but the most important step is to decide what matters most to your clients and your company — whether that be portfolio history, team expertise, cost, or other factors.

It can be particularly challenging to compare sustainable investment portfolios, so our advice is to start with the principles that are most important to you and your clients, and then look for a portfolio that aligns with those.

One challenge we faced was that our other investment portfolios are designed on the principles of low-cost, evidence-based investing, which is predominantly passive in nature. Tribe was instrumental in helping us bridge this gap by supporting the integration of these principles, where possible, into PNi and educating advisers on why our intentional portfolio required a more active investment strategy. They were also very willing to join client meetings to support advisers who were less familiar with sustainable investing.

Tribe Impact Capital LLP is authorised and regulated by the Financial Conduct Authority (FCA). Our registration details are set out in the FCA Register: Firm Reference No. 756411. Registered in England and Wales: OC411984. Paradigm Norton Financial Planning Ltd is also authorised and regulated by the Financial Conduct Authority (Firm Reference No. 455083).