goodfunds.com

and more...

investing, financial services, & minimums

client documents

financial planning & minimum engagements

fees for advisory services

being a good client

avoiding identity or investment frauds

meeting & working with financial advisors

referrals to other professionals

sri readings & publications

personal finance resources 

responsible philanthropy

referring people to us

guest speaker for your organization

directions to the office

Maximize your Internet browser window for best viewing. Most hyperlinks to sites outside of goodfunds.com open a new window. Simply close the new window when finished to return to goodfunds.

Selecting and Working With Your Investment Advisor, Financial Planner, or Broker

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.

Checking Regulatory Body Data

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.

Another resource if you would like to check the disciplinary history of a financial planner or advisor is the CFP Board's Search page.

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?
2. How long have you specialized in sustainable investing?
3. What can you tell me about the shareholder activism movement or community investing and how my investments might be represented in those areas?
4. Do your clients have access to community investment notes and CDs through your office?
5. Can you help your clients open sustainably invested SRI donor-advised philanthropy accounts?
6. 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.)
7. 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 annual revenues?
3. Do you pay your own rent and business expenses or does a home office pay them?
4. What designation or educational credentials do you have? What continuing education in financial planning do you pursue? 1-14 hours a year? 15-30 hours? More than 30 hours?
5. Do you offer continuous ongoing advice regarding my financial affairs, including advice on non-investment financial issues?
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 any of the following sources:
   -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. 

Best wishes!

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

continue to FAQ page

info, requests, and contacts

Community Investing Achiever in the Social Investment Forum 1% For Community investment campaign since 2002.

Calvert Foundation Advisor of the Year in 2004.

Learn more!

Fly The Earth Flag Proudly

Bookmark this page in your favorites. E-mail this web address to your friend, family, or colleague. Link to this site from yours.