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What is the Difference Between a Financial Advisor and a Socially Responsible Financial Advisor?

When it comes to investing, there are many different paths you can take. You can invest for profit, for stability, or for growth. Or, you can invest for social good. Socially responsible investing (SRI) is a type of investing that takes into account both financial return and social/environmental impact. As an investor, you may want to consider SRI if you are looking to use your money to make a positive difference in the world. SRI can take many different forms, but some common examples include investing in renewable energy, supporting companies with gender-diverse boards of directors, and investing in low-income housing. While there are financial risks associated with any type of investment, SRI offers the potential to generate both financial returns and social impact.

What is a Socially Responsible Investment Advisor?

Most people are familiar with financial advisors. Financial advisors partner with you to help you manage your money. They provide their knowledge and expertise so you can make the right choices when it comes to achieving your financial goals. These goals are not limited to just investing but could be other savings, stocks and bonds, budgeting, insurance, or even tax strategies. Working with financial advisors can cover a broad gamut of things. 

A Socially Responsible Investment Advisor is an individual who makes investment decisions with the intention of creating a positive environmental, social, and governance (ESG) impact, in addition to financial gain. This type of advisor takes into account a wide range of factors, including a company’s treatment of employees, its environmental record, and its involvement in activities that may be harmful to society. By investing in companies that are engaged in socially responsible practices, a socially responsible investment professional can help to promote a more sustainable and just world. In recent years, there has been an increasing demand for this type of advisor, as more and more people are interested in using their money to make a positive difference in the world. While there are many different ways to measure social responsibility, there is no single definition that is universally agreed upon. However, most experts agree that a socially responsible investment strategy is an important tool for creating a better future.

The Difference Between Financial Advisor and Socially Responsible Investment Advisor

When it comes to financial advice, there are two main types of advisers: financial advisers and SRI (socially responsible investing) advisers. Both types of advisers offer guidance on how to grow and protect your wealth, but they take different approaches when it comes to investments.

Financial advisers typically focus on maximizing returns, regardless of the social or environmental impact of the investment. SRI advisors, on the other hand, consider a wide range of factors beyond just financial gain when making investment recommendations.

SRI funds invest in companies that meet certain criteria related to social and environmental responsibility. For example, an SRI fund might avoid ESG investing in companies that produce tobacco products or services that contribute to climate change. Some SRI funds also take an active role in promoting corporate social responsibility, by engaging with companies on environmental, social, and governance issues.

While SRI funds have traditionally been associated with lower returns than traditional investments, this is no longer always the case. In fact, many SRI funds have outperformed traditional investments in recent years. And as more investors become interested in making responsible choices with their money, the demand for SRI funds is likely to continue to grow.

Whether you’re interested in maximizing returns or making socially conscious investments, there’s a financial adviser out there who can help you meet your goals. The key is to find an adviser who aligns with your values and who has the experience and expertise to help you reach your financial goals.

Why Is Socially Responsible Investing Important?

What started as a niche segment of investors looking to be more value-minded when it came to investing has now turned into a mainstream way to invest. Environment, Social, and Governance (ESG) is now factored into overall investment decisions for many people.

Socially responsible investing (SRI) is an opportunity for you to not only be profitable but impact the world in a giant way. That is a good thing, no matter how you look at it.


Whether you’re seeking to align your investments with companies that minimize their carbon footprint or develop technologies in alternative energy sources or hold stock in Black-owned or women-owned businesses, you know you’re contributing to something that will have a positive impact on society.

Choosing a Socially Responsible Financial Advisor

If you are concerned about making socially responsible investment choices, it is important to choose an advisor who shares your values. Here are some things to look for when choosing a socially responsible financial advisor:

Holistic Approach

When it comes to wealth management, it is important to find an advisor who takes a holistic approach. This means that they will consider more than just your financial goals when making recommendations. They will also factor in your social and environmental goals. This is important because your wealth is not just about money. It is also about your impact on the world around you. A good wealth manager will help you to make choices that align with your values and that will have a positive impact on the world.

Fiduciary

When it comes to financial planning, it’s important to choose an advisor who is a fiduciary. This means that they are legally required to act in your best interests. They should not receive commissions or other forms of compensation that could create conflicts of interest. Instead, they should be fee-only advisors, which means they only get paid for their services, not for selling products. As a fiduciaries, they are also required to disclose any potential conflicts of interest. So if you’re looking for someone to help you with your financial planning, be sure to choose a fiduciary advisor.

Investment Policy

Does the firm have any guidelines in place for socially responsible investing? Do they avoid investments in certain sectors, such as tobacco or weapons manufacturing? Are they willing to consider socially responsible screens when making ethical investment decisions? These are all important questions to ask, as they can help you better understand the firm’s stance on socially responsible investing. By understanding the firm’s investment policy, you can make sure that your own values align with the firm’s, and that you’re comfortable with the way they’re handling your money.

Voting Policy

When it comes to choosing an investment firm, it’s important to consider more than just financial returns. You also need to make sure that the firm’s voting policies align with your social and environmental values. Otherwise, you risk seeing your money being used to support causes that you oppose. Fortunately, most firms are happy to provide information on their voting policies upon request. Once you have this information, you can make an informed decision about whether or not to invest with the firm. If you do decide to invest, you can also inquire about the firm’s willingness to engage in shareholder activism on your behalf. By doing your homework and making your voice heard, you can help ensure that your money is being used to support the causes that are important to you.

Finally, make sure that you feel comfortable with the advisor and the firm. Do you feel confident that they will act in your best interests and help you achieve your socially responsible investing goals?

While there are many differences between a traditional financial advisor and a socially responsible investment advisor, the end goal is the same: to help clients reach their financial goals. If you’re looking for an advisor who aligns with your personal values, be sure to do your research to find the right fit for you. And if you want to make a difference in the world while reaching your financial goals, look for an advisor who specializes in impact investing.

Ready to take the next step? Contact Changemakers today and let us show you how easy it is to invest in what you believe in.