Heart and Money: Finding an Socially Responsible Investment Advisor That's Right For You
Heart and money - these are words that don't usually appear in the same sentence, unless, of course, you happen to be speaking with a socially responsible financial advisor.
Many people want their investments to be consistent with their values; so many, in fact, that social investing has become a two trillion dollar industry. Over the past 20 years the field has grown organically, pushed forward by a grassroots movement of activists who have proved you don't have to wall off your heart to grow your money. Today, the full array of investment options is available for socially aware investors: mutual funds, bonds, stock portfolios and advisors that specialize in helping socially aware investors manage their finances.
If you choose to work with a financial advisor, how do you decide who is right for you?
It's hard to imagine activist financial planners and money managers, but that really is how the pioneers in the field think of themselves. Says Joan Bavaria, CEO of Trillium, the first social money manager (founded in 1982), "Trillium was set up to do social activism, not just to clutter the world with yet another financial advisor." Trillium's website proudly states, "We are a majority employee- and women-owned firm, guided by a belief that investing can return a profit to the investor, while also promoting social and economic justice."
"I'm an activist and then I became a money manager," notes Carsten Henningsen, Progressive Investment Management CEO, another SRI pioneer. "Doing this work really comes from my heart. It's the way I make change in the world."
"Our clients tend to be people that live, look and breathe sustainable living because that's really who we are," says Hal Brill, president of Natural Investment Services, another SRI pioneer. "People know when they talk with us about the importance of organic food and renewable energy that we share their values."
In fact, choosing an advisor who shares your values is an important consideration, says Eric Leenson, Progressive Asset Management CEO. "You have better relationships with people that can really empathize with you. I think you want to look for someone that shares your views and has developed the professional skill set to translate your values into appropriate investment decisions."
Socially responsible investing (SRI) started with a focus on negative screening - filtering out companies that don't meet baseline standards of social and environmental responsibility. SRI investors generally stay clear of companies that make more than five percent of revenue from tobacco, alcohol, and nuclear or military weapons. Today, the field has evolved. Leading firms also use positive screens, seeking out companies that proactively meet high standards, while actively using the shareholder advocacy process to work with companies that need to improve. The leaders also participate in the trade association Social Investment Forum's 1% or More Campaign, investing at least one percent of assets under management in community investments.
Before you look for an advisor, do some soul-searching to clarify your values. Is it important to you to work with someone that employs all facets of SRI investing, or are you satisfied with simply screening out certain companies you don't feel comfortable investing in? Are you more concerned about some issues than others, such as environment, social issues or animal welfare?
"When you begin working with someone, s/he can help you further define your values and investment goals. An SRI professional should have the skills to help you go deeper into discovering your values over time," says Leenson.
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Heart and Money: Finding an SRI Advisor That's Right For You
