While financial advisors have been around about as long as money itself, a new breed of so-called “green” practitioners is focusing on helping clients grow their personal nest eggs while contributing to the achievement of larger social and environmental goals. By integrating clients” savings, investment, philanthropic and tax strategies with socially responsible values, these green financial advisors are helping to leverage hundreds of millions of dollars for worthy causes every year in the U.S. and beyond.
Green Money Man
Eric Smith, a certified financial planner specializing in “green” money management, began dabbling in socially responsible investing (SRI) with his own Bar Mitzvah money more than two decades ago—and never looked back. While today he focuses on helping institutional investors and high net worth individuals put their money where their socially responsible mouths are, he cut his teeth on advising Average Joes on financial strategies that would help them build financial momentum while improving their communities and environment.
According to Smith, the first step in finding an appropriate advisor is to comb through any one of several excellent directories listing “green” financial service providers. The Social Investment Forum, the Financial Planning Association, SRI World Group and Calvert Funds all offer free listings of advisors specializing in values-based financial planning. Smith recommends checking the names of those advisors who make the first cut against lists of bad actors updated continuously by the Certified Financial Planner Board of Standards.
The next step would be to interview the finalists. Smith suggests trying to speak with candidates at their offices to get a feel not only for their professionalism, but also their commitment to the important values. “Initial discussion with your financial planner might include conversation about their scope of services, fees and licenses,” Smith says. “You might also want to know about the firm they are affiliated with and professional networks that they are part of.” Smith adds that the best advisors listen carefully to their clients” needs before suggesting any given course of action.
When George Gay founded the First Affirmative Financial Network (FAFN) back in 1982 to help individuals align personal values with financial decision-making, he had 55 SRI-focused financial planners in 20 states managing less than $5 million in client assets. These days, Gay’s network consists of 140 advisors working with about $460 million in assets across all 50 states. FAFN’s expansion mirrors the growth in socially responsible investing in general, with assets managed according to values-based criteria growing from $639 billion to more than $2 trillion—an increase of 249 percent—over the last decade alone.
“I believe my choices have consequences, and I want to make responsible decisions with my money,” says Gay. “That’s how a lot of people feel.” He adds that the SRI bandwagon doesn’t seem to be slowing down due to its increased load, though, with many values-based investment products like screened mutual funds growing faster than their traditional counterparts since the mid-1990s.
Investing With Your Values
Meanwhile, the financial advisors over at Natural Investment Services, a FAFN-affiliate, literally wrote the book on values-based investing. Indeed, the firm’s founding partners authored the influential 1999 book Investing with Your Values: Making Money and Making a Difference. Individuals looking for help planning their financial future can tap into this motherlode of knowledge by signing on as a client.
“While it is important to support companies that make money while making a difference—and trying to hold those that don’t accountable for their actions and policies—we also take satisfaction in helping people save for their future while having integrity along the way,” says Michael Kramer, a Hawaii-based advisor for the firm. “Investors like knowing they can sleep well at night while their life savings is a force for positive change around the world.”
Unlike many asset managers and financial advisors who require clients to have a minimum of $1 million to start working together, Natural Investment does not discriminate along economic lines, welcoming the rich and not-so-rich alike. “We are a boutique firm, meaning we provide personal service to a small number of clients and can provide a client of any portfolio size equal time and energy depending on their needs,” says Kramer, adding that the firm’s model portfolios apply to all investors regardless of assets.
The SRI universe is expanding rapidly, with some analysts reporting 40 percent annual growth in capital invested according to values-based criteria in recent years. And with returns as good or better than traditional investments, the environmentally conscious would be well-served consulting with experts like Smith, Gay or Kramer even if they lack thorough knowledge of the financial markets.
RODDY SCHEER plans his investments carefully.