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Community Investing Achiever in the Social Investment Forum 1% For Community campaign since 2002. Calvert Foundation Advisor of the Year in 2004. Learn more!

Strategic Relationships

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Finding & working with good financial advisors

Helpful directories

If you are new to all this and need a basic orientation, review the brochure, Cutting Through the Confusion, prepared by the Coalition on Investor Education. Then...

• Take a look at the The Social Investment Forum for the member directory. There will be advisors, planners, and brokers of all stripes and flavors. 
• Another good resource is the First Affirmative Financial Network list of members by state. Members that utilize FAFN's investment management services with their clients have a special "Network Member Profile" available on the FAFN site.
• A more mainstream list is the Financial Planning Association's Planner Search service.
• Calvert Advisor Finder service can help you identify a local representative, broker, or advisor that offers those funds to their clients.

Financial Industry Regulatory Authority

The Financial Industry Regulatory Authority (FINRA), is the largest non-governmental regulator for all securities firms doing business in the United States. FINRA BrokerCheck is a free online tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers.

Consumer Guide to Financial Self-Defense

Check out the Certified Financial Planner Board of Standards, Inc. Consumer Guide to Financial Self-Defense which lays out what you must know and do to prevent financial abuse.

Conducting The Interview

If possible, consider the advantages of interviewing the advisor in person at their office. The phone is O.K. if visiting them is inconvenient or if you both are comfortable doing an initial interview by phone.

Tip: Generally avoid limited forms of communication such as e-mail, fax, or voice mail for this type of conversation. Those forms might be poor choices for an important interview such as this.

In addition to getting to know them, an initial discussion with your financial adviser might include conversation about their scope of services, fees, and licenses. You might also want to know about the firm they are affiliated with and professional networks that they are part of.

1. How much of your practice is devoted to sustainable investing services and how long have you offered them?
2. Tell me about the shareholder activism movement or community investing and how my investments might be represented in those areas?
3. Do your clients have access to community investment notes and CDs through your office?
4. Can you help your clients open responsibly invested donor-advised philanthropy accounts?
5. What degree of freedom does your firm give you in choosing investments for your clients?
   (Some investment firms only allow brokers to recommend individual securities on their "approved list". The management at many firms rarely give a fig about sustainable investing and therefore finding investments meeting both firm and client criteria makes it very difficult to arrive at sensible portfolios.)
6. Does your firm have its own name-brand mutual funds or products?
   (If so, this could lead to a conflict of interest when your broker or advisor has financial incentives or management pressure to recommend in-house brand funds. Plus, those funds are not normally portable should you decide you want to hire a different broker or adviser.)

Here are some questions that can illuminate possible broker conflicts of interest:

1. Do you have a sales quota that you have to meet periodically to stay affiliated with your present firm?
2. What is the difference between commissions and fees and how do they affect our relationship? What is the mix of commissions and fees in your revenues?
3. Does your office pay all it's own business expenses or does a home office or employer pay them?
4. What designation or educational credentials do you have? How much formal continuing education in financial and investment planning do you pursue?
5. Do you offer continuous ongoing advice regarding my financial affairs?
6. Do you take possession of or have access to my assets?
7. Does any member of your firm act as a general partner, participate in or receive compensation from investments you may recommend to me?
8. Do you earn compensation from or might any of the following add to my expenses:
   -12(b)-1 fees or trail commissions
   -Surrender charges or back-end fees
   -Soft dollar benefits
   -Contingency fees
   -Eligibility for sales prizes
9. Do you invest in the same investment products or services that you recommend?
10. Is there a full-time compliance officer at the firm you are registered or licensed with that oversees your activities?

Observe how he or she listens and responds to your concerns. Sounds obvious, but some brokers and advisors are too busy broadcasting their message to even hear your interests and needs.

Watch Out For...

1. Professionals that seem to be simply "selling" solutions in search of a problem.
2. Advisors who don't really recommend sustainable investing but will comply if you ask.
3. Individuals that boast, promise too much, and exaggerate. Or those that act as though they know everything.
4. Consultants that have too many clients and can't possibly provide adequate service to each.

If you have purchased or anticipate investing in mutual funds from a broker, take a look at the article, "Six questions to ask your broker". Your broker should be comfortable discussing these topics with you.

Finally, make your decision and monitor the relationship for a few years. Remember, you are part of this too so please consider trying to be a good client.

Well, that should give you a good start. Feel free to give us a call if you wish to discuss this further. 

Presentation

Ask Eric about scheduling an interesting presentation on this topic for your group.