How to Choose a Socially Responsible Advisor

How to Choose a Socially Responsible Advisor

Investing is a personal and unique experience for each individual. Everyone approaches investing their money with a different mindset in terms of goals, timeline, and areas of importance. Similarly, there are many types of financial advisors that set out to help people manage their money and reach their financial goals.

If you’re just starting out in the world of investing, the first thing you do is look for a trusted financial advisor that you believe will help manage and grow your investments to their fullest potential. Or maybe you’ve utilized a few different individuals or companies but never really found that comfort level you were seeking. Here are a few tips that may help establish that connection!

How do you Find an Advisor?

If you’re like most people, your search probably began online (that may even be how you found this article)! That probably became quickly overwhelming. The terms financial advisor, financial planner, and investment advisor get thrown around pretty loosely and without clear definition.

There are two options for advisors: digital or robo-advisors or an actual person. While robo-advisors are a simple, low-cost way to invest, they require frequent rebalancing and limited consultations. If your situation changes, it’s difficult to strategize with a robot. A real-live investment advisor, however, can walk with you through your goals and should be available for a quick email or phone chat if needed!

Choose a Socially Responsible Advisor

What is an Investment Advisor?

An investment advisor also referred to as a financial advisor, is an individual or a firm that gives advice about investing in stocks, bonds, mutual funds, or exchange-traded funds to their clients. A good investment advisor will listen to your history, your goals, and your risk tolerance to help determine a financial path.

If you’re interested in socially responsible or impact investing, your advisor will help you invest only in things you are passionate about or believe in. Similarly, they can help you divest (opt out of) issues that you feel strongly against. At Invested Interests, we help make this easy by offering four top portfolios focused on the Environment, Peace, Diversity, and Human Rights. If there’s something you’re particularly passionate about, we can thoroughly screen to ensure you’re investing accordingly.

Professional Background and Education

As we mentioned, the term financial advisor is a general notation with many subspecialties. In a licensed and credentialed industry, each credential speaks to a different level of education and competence within the specific financial arena. Ask your potential advisor to share their experience and financial education (in plain language) as well as their successes and failures in practice.

Important Questions to Ask

  • How long have you specialized in impact investing?
  • What is your investing approach?
  • Will you be my main contact?
  • Do you understand my objectives and risk tolerance?
  • How are you compensated?
  • Can I reach out with concerns should they arise?

What It All Comes Down To

Choosing an investment advisor isn’t as simple as a quick, online search. Understanding your own goals and understanding your advisor’s experience and knowledge is paramount to a good relationship. If your advisor understands your personal investment needs, they will advocate for your best interests.

Questions about socially responsible investments or wondering if it’s the right investment move for your future?  Request a FREE impact investment consultation, and we’ll be in touch!

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