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How to Find a Socially Responsible Financial Advisor

Becoming an ESG investor these days has never been easier. With an increasing number of financial products focusing on environmental, social and governance issues, many investors are confused about which one best suits their needs.

To help with this, some investors may be considering financial advisors who can focus on ESG and provide investment ideas that closely track the moral and financial goals of their clients.

For investors who want to go that route, here’s how to get started and some questions to ask future advisors.

What tools can help you find a financial adviser focused on ESG?

There are several free, searchable online databases that list financial advisors who are self-aware that they are ESG-focused. Keep in mind that what is listed in the directory does not guarantee the competence or investment power of the advisor. Due diligence on your side is still recommended.

  • The Certified Financial Planner Board of Standards Inc. database allows investors to filter “Socially Responsible Investment” to find certified planners nationwide that offer these services.
  • In the College for Financial Planning database, investors can search for advisors by the name “Chartered SRI Counselor or CSRIC”.
  • Green America, a non-profit organization focused on issues such as climate and clean energy, sustainable food and responsible investment, 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 members of the USSIF, a sustainable investment industry association. According to a Green America spokesman, listing advisors are self-reporting whether they have experience in creating fossil fuel-free portfolios and whether they have worked with clients to pursue fossil fuel-free investments. ..
  • The US SIF member roster allows investors to perform a basic search in the “Financial Planners, Advisors, Brokers” category or perform an advanced search to narrow the list by city, state, or zip code. increase.
  • The XY Planning Network, a member-based organization of fee-only advisors, has a portal for finding advisors. Entering SRI / ESG as a keyword search will bring up a list of dozens of advisors who have identified this area of ​​expertise. To become a member of the XY Planning Network, advisors must work with Generation X / Generation Y clients to some extent, operate for a fee only, and have a particularly good relationship with Finra, among other standards.

How can I evaluate an advisor’s ESG skills?

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

Once you find an advisor with a clear disciplinary history, you can ask the advisor directly about your experience with sustainable or impact investing and how long it was part of their practice, said Morningstar Research Services Manager. Says Josh Charleson, director of the selection. LLC, a subsidiary of Morningstar..

The advisor asks how many clients have created an ESG-focused portfolio. “Ideally, you’ll be working with an advisor who has some history in the field, not just someone who has just set foot in the field,” says Charleson.

NSWould you like to assess whether your advisor is in line with my goals?

Start by asking your advisor about your approach to ESG, social responsibility, and impact investing. If you are looking for a specific focus, such as an environmental investment or a specific impact target, can your advisor address this, or does your advisor offer only a few selected investment models that are not easily customizable?

Share your thoughts

What do you think are the most important criteria when choosing a financial adviser? Join the conversation below.

“If you’re more focused on impact investing, or don’t want tobacco or nuclear energy stocks, can your advisor customize your plans and portfolio to your liking?” Charson Says.

Or if you are interested in having a more diverse portfolio centered on sustainability and impact investing, how do advisors achieve this?

It is also important to see how the advisor’s return on investment is compared to the appropriate benchmark, regardless of whether the advisor recommends investing in a fund or individual stock.

What are the other ways to evaluate an advisor’s ESG expertise?

There is no guarantee, but financial advisors with a real interest and expertise in ESG and impact investing usually emphasize it on their website and LinkedIn profile, says Michael Young, USSIF’s Education Program Manager.

“It’s a good starting point if they’re publicly showing that they’re doing this,” he says.

Young encourages you to ask questions about the network, affiliation, and designation of professionals involved in sustainable investment. For example, are advisors members of Ceres, Green America, or US SIF, a non-profit organization focused on sustainability? Do advisors talk about this topic at sustainable investments and other investor meetings?

In 2018, the University of Financial Planning began offering accreditation for Socially Responsible Investment, an SRI counselor-designated program. This is a relatively new designation, but Young says it could be another signal of interest and ongoing commitment in this area.

Winokur Munk is a writer in West Orange, NJ. Her contact information is reports@wsj.com.

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How to Find a Socially Responsible Financial Advisor

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