124. What to ask a financial planner if you want them to consider your societal values

Are you passionate about having a positive impact in the world but unsure how to incorporate that into your financial strategy? In this episode, we'll explore how to have a thoughtful conversation with your financial advisor about aligning your investments with your social impact goals.

You'll learn:

• The key questions to ask your advisor to understand their knowledge and approach to socially responsible investing. This will help you assess if they are up-to-date on the latest trends and strategies in this rapidly growing field.
• How to clearly communicate your specific values and priorities around issues like the environment, social justice, corporate governance, etc. Being able to articulate your values will allow your advisor to better understand your goals and help you build an appropriate portfolio.

Investing with intention is one of the most powerful ways to drive positive change. But it starts with having an open and honest dialogue with your financial advisor. Tune in to gain the tools and confidence you need to make your money matter in a way that aligns with your principles.

Links from today’s episode:

3 Questions Investors with Social Justice Values Should Ask Their Advisor. Adasina Social Capital May 2023

https://adasina.com/3-questions-investors-with-social-justice-values-should-ask-their-advisor/ 

ICYMI another episode you might enjoy:

Episode#108 Pros and Cons of ESG investing (recorded before the 2024 rebranding of this show)

Connect With Genet “GG” Gimja:

Website https://www.progressivepockets.com

Twitter https://twitter.com/prgrssvpckts 

Work With Me:

Email progressivepockets@gmail.com for brand partnerships, business inquiries, and speaking engagements.

Transcript

Welcome to Progressive Pockets! I go by GG, that’s short for Genet Gimja. This is a show about reclaiming some of our power. Because the chances are, if you’re listening to this, you probably vote, you might even send letters to your senators, maybe you identify as an ally or activist of some sort. But what about our money? I’m curious about whether there’s some power we’re leaving on the table. Or in our wallets!

Today’s episode is about what to say to your financial advisor if you want that person to start incorporating your societal values into how they’re advising you. Usually when you onboard with a financial professional, they will ask you questions about your financial goals- when you want to retire, some information about your life so they can understand your financial needs- who are you financially responsible for? They might ask about your giving, but you can go even deeper with your financial advisor. You can speak to your values as they might impact your whole financial strategy, not just your giving. 

Because if you think about it, most Americans are giving around 5ish percent of their income (actually the number is a lot higher for Americans that make the least amount of money), but let’s just call it 5%. That is where we usually get to express our values whether we are concerned about racial equity or climate change or prison reform or abolition, literally whatever your thing is, let’s not limit ourselves to only being able to get creative about 5% of our money. Talk to your financial planner about the other 95% of your money.

Let’s talk about how to do that.

If you want your financial advisor to incorporate your societal values into your investment portfolio, here are some key points you can communicate:

1. Ask your financial advisor if they have experience incorporating social values into their financial strategies, into how they invest their clients’ portfolios. There are definitely financial advisors that are very used to this, in fact, you can find one of these professionals pretty easily. Episode 120 was all about that. But before you go and fire your financial advisor, first have this convo and see if they can work with you in this way. So ask if they have experience with clients who want to reflect their societal values onto what they’re doing with their money. Your advisor might respond by telling you about all the ways they do that, maybe they have a whole intake process to interview you about your values and then they have multiple strategies to align your money and your values… or maybe they will scratch their head and say, uh are you talking about ESG investing? ESG is just a score or a rating for an investment that you might be considering. It’s an abbreviation for environmental, social, governance and a lot of investments even have an ESG score. The ESG score isn’t a great way to score whether or not an investment is socially responsible- there are lots of episodes about that, you can scroll back to episode 108 to learn more about that, but it is an option and you can feel out whether your financial advisor tends to recommend ESG investments to folks. In fact you could even suggest that they listen to episode 108, I’ll include the link in the show notes, it’s short and very concrete and a great 101 on ESG ratings beyond the hype. 
2. Tell them your specific values and causes you care about, such as environmental sustainability, social justice, ethical labor practices, etc. The more specific you can be, the better they can align your investments. And you know what, if this step is difficult, if you are feeling overwhelmed even knowing what values to focus on, let me know and I can do an episode about that. There are different methods you can choose to zero in on some values to focus on for your money strategy.
3. Ask about socially responsible investing options like mutual funds and ETFs that screen companies out if they don’t meet social impact criteria. This is usually the first step of impact investing. Take out the stuff that goes against your values. There are tons of ready made products on the shelf ready for different things you might want out of your investments, like prisons or fossil fuels, there are so many products. So even if your financial planner isn’t well informed on fossil fuels or prisons or whatever, there are organizations that have done the work already and can help lead you to investments that might be more appropriate for your values.
4. If you’re ready, and you want to go beyond just excluding “harmful” investments, and I’m using quotes around that because most investments are going to include SOME level of harm to the planet and our people. But you can go beyond taking out the bad, you can have your advisor actively look for the good. Where are the companies that are trying to combat climate change for example? This is the next step. Ask your advisor if they have any experience with that sort of investing.
5. For whatever you decide with your advisor, whether you keep it simple with screening out the bad stuff or you actively are going out and looking for positive impact investments, ask your advisor to report to you regularly on how your investments are performing not just financially, but in terms of their social/environmental impact. This reinforces the value alignment.
6. Discuss shareholder advocacy options where you can use your investor voice to push for positive change at companies on issues you care about. Do you want your advisor to let you know when there are shareholder resolutions you can vote on? Have that discussion beforehand.

The key is to have an open dialogue about fully integrating your personal values into all aspects of portfolio construction and management.

A good advisor will listen and create a customized solution for you.

I recently reviewed a book called The Social Justice Investor back on episode 121 and in that book, author Andrea Longton included chapter 8 called “having the conversation” with some tips and example dialogue. So you can get an actual script there if you want more guidance.

So to recap, here’s what we covered today. Here’s how to talk to your financial advisor or planner about incorporating your social and societal values into what they’re helping you do with your money:

Step 1: ask if they’ve ever done this before. Do they have a tried and true way of working with clients who care about more than the bottom line, or are you two going to learn it together.

Step 2: share your values, even if you think it’s impossible for your money to line up with those values, just say them out loud. You never know what’s out there.

Step 3: Ask about investments that screen OUT companies that don’t meet your values.

Step 4: If you’re ready for it, ask about screening IN companies that are working towards solutions that address your values.

Step 5: Ask your advisor to send you regular reports on the social impact of your investments. So in the same way they send you the financial returns, ask them to include your social returns.

Step 6: Talk to your advisor about shareholder resolutions and votes and how you can exert some influence on the companies who have your money.

I hope you enjoyed the episode today. I’m curious to know what other podcasts you’re listening to. Send me your recommendations! They don’t have to be on this same exact topic at all. Just send me whatever you’re listening to these days.

Let’s end with a quote…

“No one has a right to sit down and feel hopeless. There is too much work to do.” That quote comes from Dorothy Day.

Let’s talk again soon!