How To Find a Socially Responsible Financial Advisor or Planner

Use the lens of social responsibility to focus your search.

Some investors have long been in favor of social responsibility or socially responsible investing (SRI), that is, putting their money into ethical companies that sell products that are good for the environment and society at large, and do so with sound corporate governance.

You may be among those investors or be eager to get in on the trend. If either is the case, how do you find a socially responsible advisor or planner? Essentially, you use the same methods that apply to locating any financial investor or planner, with the exception that you use the lens of SRI to narrow your search to one with that specialty.

To give you a shortcut to finding SRI financial advisors or planners, try these organizations, which break out professionals by expertise: Green America, College for Financial Planning, XY Planning Network, and Certified Financial Planner Board of Standards.

Key Takaways

  • A number of organizations list advisors by specialties, thereby saving you time in your search.
  • When interviewing financial advisors with SRI expertise, ask them about their knowledge of the field and how long they've been in it.
  • Adverse situations, such as poor ethics, extreme weather, social injustice, and lack of diversity in corporate C-suites, have made SRI investing more popular.

What Credentials Should a Financial Advisor or Planner Have?

There are three designations a qualified financial planner might have, but the first one is the most important: certified financial planner (CFP). 

A CFP is a formal recognition of expertise in the areas of financial planning, taxes, insurance, estate planning, and retirement (such as with 401(k)s).

Owned and awarded by the Certified Financial Planner Board of Standards, Inc., the designation is given to individuals who successfully complete the CFP Board's initial exams, then continue ongoing annual education programs to sustain their skills and certification.

A better-prepared financial advisor has a chartered financial analyst (CFA) designation.

A CFA is a globally recognized professional designation given by the CFA Institute (formerly the Association for Investment Management and Research, or AIMR) that measures and certifies the competence and integrity of financial analysts. Candidates are required to pass three levels of exams covering areas such as accounting, economics, ethics, money management, and security analysis.

If you have a situation that deals particularly with taxes and accounting, you may want an advisor who is also a certified public accountant (CPA). A CPA is a designation provided to licensed accounting professionals. The CPA license is provided by the board of accountancy for each state.

The American Institute of Certified Public Accountants (AICPA) provides resources on obtaining the license. The CPA designation helps enforce professional standards in the accounting industry. Other countries have certifications equivalent to the CPA designation, notably, the chartered accountant (CA) designation.

Tips for Narrowing Down Your Search

The National Association of Personal Financial Advisors (NAPFA) offers a checklist on how to evaluate a financial advisor:

  • Talk with your loved ones about what you want to accomplish by working with an advisor
  • Create a list of advisors, compiled through word-of-mouth advice, professional organizations, or lists
  • Do research on your candidates, come up with a top three by reviewing websites, and check for any disciplinary actions. You'll find shortcuts through the Financial Industry Regulatory Authority's (FINRA) BrokerCheck and the CFP site, both of which can help you evaluate brokers
  • Make a list of questions to ask the candidates, starting with their approach
  • Meet them face-to-face, if possible, or by Zoom
  • Make sure you feel confident about their experience and credentials and comfortable talking with them

The Bottom Line

Once you've decided that your strategy will focus on SRI, you will need an advisor or planner with that expertise. That's easier now since more and more investors want to let their investments do the talking about their commitments.

What Is SRI?

Socially responsible investing (SRI), also known as social investment, is an investment that is considered socially responsible due to the nature of the business the company conducts. The company will commonly utilize socially conscious investing. Socially responsible investments can be made with individual companies with good social value and through a socially conscious mutual fund or exchange-traded fund (ETF).

What Is FINRA?

The Financial Industry Regulatory Authority (FINRA) is an independent, non-governmental organization that writes and enforces the rules governing registered brokers and broker-dealer firms in the United States. Its stated mission is "to safeguard the investing public against fraud and bad practices." It is considered a self-regulatory organization.

FINRA was created as the result of the consolidation of the National Association of Securities Dealers (NASD) and the member regulation, enforcement, and arbitration operations of the New York Stock Exchange (NYSE) in 2007. The consolidation was meant to do away with overlapping or redundant regulation and reduce the cost and complexity of compliance.

What Is the C-suite?

C-suite, or C-level, is a widely used term describing a cluster of a corporation's most important senior executives. C-suite gets its name from the titles of top senior executives, which tend to start with the letter C, for "chief," as in chief executive officer (CEO), chief financial officer (CFO), chief operating officer (COO), and chief information officer (CIO).

Article Sources
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  1. Certified Financial Planner Board of Standards. "The Certification Process."

  2. CFA Institute. "How to Become a CFA Charterholder."

  3. Association of International Certified Professional Accountants. "Become a CPA."

  4. NAPFA. "How to Find an Advisor."

  5. FINRA, "Five Steps to Protecting Market Integrity."

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