It's hard to know how many financial advisors practice socially responsible investing. Industry associations don't track the data, not everyone defines SRI the same way, and involvement runs the gamut from dabblers to diehard SRI enthusiasts. But as mainstream investors increasingly inquire about this space, more advisors have gone down the SRI path.
Among them is San Francisco-based Wetherby Asset Management. Over the past decade, it has broadened its capabilities from initially doing just socially responsible public investing to doing impact investing in both public and private vehicles.
Impact investing is designed to have a positive impact on social or environmental issues, while SRI is designed to avoid or mitigate negative social and environmental impacts, says Daniela Lee, a senior investment associate for Wetherby.
Why the impact investing/SRI angle? "We feel it's a strategic initiative we should get in front of," says Michael Alpert, a wealth manager with Wetherby. "We're looking at it as a longer-term retention and growth area."
The firm has a dedicated research team that focuses on impact investing/SRI and has developed a platform that covers all asset classes in this space. Lee says a consulting arrangement with San Francisco-based Imprint Capital Advisors, a leader in impact investing, helps Wetherby with due diligence, ongoing monitoring and firm education.
Alpert estimates that roughly 5% to 10% of Wetherby's clients now have some exposure to impact investments. Clients desiring more in-depth impact investing, such as an East Coast client who wanted to focus on investments tied to improving living conditions in his city, are partnered with Imprint.
Lee says that attending the SRI in the Rockies and SOCAP (Social Capital Markets) annual conferences, as well as participating in speaking engagements, has helped Wetherby get its name out there in this space.
Mary Rinehart, CEO of Rinehart Wealth Management, introduced SRI to her 27-year-old Charlotte firm more than ten years ago. Roughly 15% to 20% of its $260 million of assets under management are now tied to SRI. That's "not half as much as I'd like," she says.
"I've always been a tree hugger from the get-go--socially involved and hopefully progressive," says Rinehart, adding she has worked on projects involving her church, river protection, land trusts and more. But it was an environmentally-active client who inspired her to consider SRI.
"She said, 'I'd like to put my money where my mouth is.' I said, 'Give me six months and I'll find out [how],'" says Rinehart. She studied Web sites, familiarized herself with the indices and platform of KLD Research & Analytics (now part of MSCI) and began to regularly attend SRI in the Rockies. Her socially responsible investments include mutual funds and individual equities (domestic and international) and fixed income funds.
Rinehart says she's attracted a few clients through her SRI practice. She notes many investors still see a large disconnect between doing good and making money. "To me, that's a misdemeanor. I think you can make better money long term that way," she says. She hopes her new education Web site, StartInvestingResponsibly.com, will help people define their values.