How to find a socially responsible financial advisor



It is not easy to be an ESG investor these days. Financial products focusing on environmental, social and governance issues have mushroomed, leaving many investors confused as to which best meets their needs.

To help, some investors might consider financial advisers who focus on ESG and are able to come up with investment ideas that closely follow their clients’ moral and financial goals.

For investors who want to go this route, here’s how to get started, along with some questions to ask potential advisors.

What tools can help me find an ESG-focused financial advisor?

There are several free and searchable online databases that list financial advisors who identify as ESG-focused. Just keep in mind that being listed in a directory is not an endorsement of an investment adviser’s abilities or prowess. Due diligence on your part is always recommended.

  • The Certified Financial Planner Board of Standards Inc. database allows investors to filter by “socially responsible investing” to find nationally certified planners who provide these services.
  • In the College for Financial Planning database, investors can search for advisers under the designation “Chartered ISR Counselor or CSRIC”.
  • Green America, a nonprofit alliance that focuses on issues such as climate and clean energy, sustainable food and responsible investing, has a list of financial planning and investment consulting firms. The advisors listed here are certified members of Green America’s Green Business Network or are members of US SIF, a sustainable investment business group. According to a spokesperson for Green America, the listed advisers themselves report whether they have experience building fossil-fuel-free portfolios and have worked with clients to seek fossil-fuel-free investments.
  • In the US SIF Membership Directory, investors can perform a basic search under the category “financial planners, advisers and brokers” or an advanced search to narrow the list by city, state or zip code.
  • XY Planning Network, an organization made up of paid advisor members, has an advisor search portal. Entering SRI / ESG as a keyword search will bring up a list of several dozen advisers who identify themselves as having this specialty. To be a member of the XY Planning Network, Advisors must work with Gen X / Gen Y clients to some extent, operate on a fee-only basis, and be in good standing with Finra, among other criteria.

How to assess the ESG prowess of the advisor?

First, check to see if an advisor has a disciplinary history, using Finra’s BrokerCheck, the Securities and Exchange Commission’s investment advisers public disclosure website and the CFP Board website. Enter the first and last name of the advisor to verify customer complaints, regulatory action or other disciplinary action.

After finding an advisor with a clear disciplinary background, you can ask them directly about their experience with sustainability or impact investing and how long that has been part of their practice, says Josh Charlson, director of manager selection. for Morningstar Research Services. LLC, a subsidiary of Morningstar Inc. Ask for how many clients the advisor has created ESG portfolios. “Ideally, you would work with an advisor who has some experience in this area rather than someone who is just getting started,” says Charlson.

How do I assess whether an advisor matches my goals?

Start by asking the advisor about their approach to ESG, socially responsible and impact investing. If you are looking for a specific goal, such as environmental investing or a particular impact goal, for example, can the advisor fit into that, or does the advisor only offer a few investment models? selected that are not easily customizable?

“If you are more focused on, say, impact investing, or if you don’t want tobacco or nuclear stocks, is the advisor able to customize the plan or portfolio by according to your preferences? Said Mr. Charlson.

Or, if you’re interested in a more diversified portfolio focused on sustainability and impact investing, how would the advisor go about it?

Whether the advisor recommends that you invest in funds or individual stocks, it is also important to see how their investment returns compare to the appropriate benchmarks.

What are the other ways to assess the ESG expertise of an advisor?

While this is not a guarantee, financial advisors with a genuine interest and expertise in ESG and impact investing will typically highlight it on their websites and LinkedIn profiles, says Michael Young, manager. education programs at US SIF.

“If they’re showing up in the public sphere they’re doing that, that’s a good place to start,” he says.

Young recommends asking them about their professional networks, affiliations and titles related to sustainable investing. For example, is the advisor a member of Ceres, a nonprofit organization focused on sustainability, Green America or US SIF? Does the advisor speak at conferences on sustainable investing or other investors on the subject?

The College for Financial Planning in 2018 began offering a certification in socially responsible investing, its SRI advisor designation program. It’s a relatively new designation, but Young says it may be another sign of interest and continued commitment to the field.

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