Socially Responsible Investing Robo Advisor


Socially Responsible Investing Funds

What You Need To Know About Socially Responsible Investing (SRI)

One way to engage in socially responsible investing is by using funds focusing on the category. There is a large and growing list of mutual funds and exchange-traded funds participating in the sector.

One advantage with funds is you can focus on the areas of social responsibility you consider to be the most important. Many funds are set up to invest in companies observing very specific criteria.

There are some caveats with funds as well. Once again, it may be challenging to find the one fund most closely matching your concerns. As it is a relatively new sector, you may not find too many funds with more than a few years of investment experience and results.

Also, socially responsible investing is something of a boutique offering and may come with higher than usual load fees. And of course, the funds may not be doing as well as an S& P 500 index fund.

Here’s a list of the 10 largest socially responsible ETFs in terms of assets :


Highest Fee Sri Robo Advisor

Personal Capital also has an SRI portfolio option, though it looks very similar to Betterments with only US Large Caps geared towards ESG standards.

Their service is a hybrid of traditional financial advisors and robo advisors.

Both Personal Captials minimum investment and fees are significantly higher than any of our other options.

Management fees: 0.89% until you hit $1M, then fees are reduced to 0.49%

Minimum investment: $100,000

Accounts available: Traditional IRA, Roth IRA, SEP IRA, Trusts, Taxable Personal and Joint.

Is There A Robo

Sustainfolio is a robo-advisor completely devoted to sustainable investing. This socially responsible robo-advisor is a division of Sustaininvest Asset Management, founded in 2013, and is an independent investment firm 100% focused on sustainable investing.

Dale Wannen, founded the Sustainfolio Robo-Advisor to further the mission of sustainable investing. Hes the real deal with 18 years in wealth management and financial services.

Wannen aligns his dollars with his passion and donates 1% of the companys annual sales to environmentally focused non-profit organizations. In his spare time, Wannen engages in sustainable investing advocacy!

If you prefer a socially conscious investing robo advisor, instead of the DIY investment approach, learn more about Sustainfolio.

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Understand Your Investment Goals

Helping you to understand your investment goals and needs is one of the key roles a human advisor has traditionally played. Robo-advisors can take you through helpful prompts and provide tools to help you properly fill in the details. In the end, however, their understanding of your financial situation and future plans are based mostly off of what you input. Some robo-advisors do take the extra step of profiling you based on your age and income in order to compare your needs and goals with those of similar users. That being said, you have to do some of the work yourself to get the most out of a robo-advisor.

Every investor has different goals when it comes to buying a house, saving for a vacation, paying for college , and so on. Depending on your age, you may need to prioritize certain goals over others. The more definition you can give to your goals, the better a robo-advisor will be able to support you.

If you are in your 20s, for example, you may have goals like buying a house and retirement on your list. The goal of retirement has a much longer timeline in your 20s and, given that there is most likely decades until you will be drawing on retirement funds, you can be more aggressive with the funds for that purpose. Saving for a house, however, is ideally a shorter term goal with capital preservation being a priority that will temper your risk tolerance.

Wealthsimple Vs Rbc: Socially Responsible Investments

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Both Wealthsimple and RBC Investease take responsible investing seriously.

Wealthsimple Invests SRI ETFs:

Contain no investments in the oil, tobacco, or weapons industries.

Stick to more sustainable industries like clean energy, electric cars, and plant-based meats.

Avoid the top 25% of carbon producers in each industry for their SRIs

Make sure that every company in their fund has at least 25% women on their board of directors. The fact that this is still notable in 2021 is a whole other issue, but we appreciate the gesture.

RBC has branded their SRIs Responsible Investing because it goes beyond the social aspect. They:

Avoid companies in the tobacco, controversial weapons, and civilian firearms industries

Avoid any company involved in severe controversies .

Assess all investment candidates based on environmental, social, and governance standards.

They have a lot of math to back this up, which you can find on their website, but basically what it means for you is a collection of ETFs you can feel good about investing in.

The bottom line here is that both Wealthsimple Invest and RBC Investease are dedicated to finding unproblematic investment options, not only environmentally but also socially and legally. RBC has a slight leg up on Wealthsimple in this area because they offer a wider selection of ETFs with lower average MERs, so if SRIs are your main focus, you may want to keep this in mind.

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Is Ally Invest Good For Beginners

The Ally Invest Managed Portfolios might be suitable for beginning investors. You can start with the managed Ally Invest robo-advisor to oversee your investments. Beginners who choose the zero fee investment management option need to understand that this choice yields a more conservative portfolio. Well explain more in the Investments section.

As your experience grows, you can try your hand at investing on your own with the Ally Invest stock, bond and fund investment options.

Just be aware that for robo investing, there are other platforms with zero or low management fees such as M1 Finance, Schwab, Betterment and Wealthfront that dont require a 30% cash allocation.

Sustainfolio And Sustainable Investing Wrap Up

More and more investors are living in line with their values and principals. From eating organic food, driving an electric car or working for a company that cares about its employees, socially conscious living is growing.

Investing is no exception.

Many robo-advisors and investment companies are adding socially-conscious or sustainable investment options. Fortunately for investors there are hundreds of funds that screen firms ESG practices.

Finally, Sustainfolio is currently the only full-service robo-advisor devoted to sustainable investing. The fact that Sustaininvest donates a portion of its profits to related causes and the company owner, Dale Wannen is an advocate ensures that you will be investing with a true sustainable investing practitioner. With Schwab running the back-end, you can invest with confidence in the Sustainfolio platform.

Disclosure: Please note that this article may contain affiliate links which means that at zero cost to you I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I dont believe is valuable.

This article was sponsored by Sustainfolio, although all opinions expressed are my own.

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Youre Talking The Talk And Walking The Walk

In his book, The Integrity Dividend, Tony Simons talks about how people try to be about too many things at once, and it confuses their brand. He recommends picking a few core values and sticking to them, then living them out in everything you do.

How does this apply to SRI?

If your values are important to you, then socially responsible investing allows you to put your money where your mouth is, so to say. Its hard to insist youre a committed environmentalist if part of your portfolio is invested in companies or industries that are destroying the environment. By investing in socially responsible businesses youre doing more than talking the talk, youre walking the walkwith your money.

Having this kind of approach, and sticking to your core values, will allow you to focus on other aspects of your financial life, such as automatic payroll savings, college savings, and purchasing a home. The limitations of ethical investing provide you with some assurance that you dont have to check in on your investments continually. Just pick a few socially responsible funds and go with it.

Understanding Socially Responsible Investment

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Socially responsible investments include eschewing investments in companies that produce or sell addictive substances in favor of seeking out companies that are engaged in social justice, environmental sustainability, and alternative energy/clean technology efforts.

In recent history, socially conscious” investing has been growing into a widely-followed practice, as there are dozens of new funds and pooled investment vehicles available for retail investors. Mutual funds and ETFs provide an added advantage in that investors can gain exposure to multiple companies across many sectors with a single investment. However, investors should read carefully through-fund prospectuses in order to determine the exact philosophies being employed by fund managers, along with the potential profitability of these investments.

There are two inherent goals of socially responsible investing: social impact and financial gain. The two do not necessarily have to go hand in hand just because an investment touts itself as socially responsible doesn’t mean that it will provide investors with a good return, and the promise of a good return is far from an assurance that the nature of the company involved is socially conscious. An investor must still assess the financial outlook of the investment while trying to gauge its social value.

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How Does The Sustainfolio Platform Work

Visit the Sustainfolio Robo-Advisor website and look around. The website is easy to navigate and gives a great overview of the Sustainfolio investment philosophy:

Sustainfolio is a technology-based investment platform designed for individuals who want to integrate sustainability into their portfolios digitally,

When youre ready, click on the Institutional Intelligent Portfolios and youll be taken to the robo-advisor platform on the Schwab website. Input the access code and youre on your way.

Even if youre not ready to commit, you can take the initial questionnaire and find out what your portfolio would look like.

Heres what to expect as you enter the Sustainfolio portal on the Schwab Website:

  • Initial questionnaire answer a few questions related to the goal of the account, risk level, time horizon, and account type.
  • Based on your responses to the questionnaire, youll be provided with an asset allocation, showing the percentages invested in various asset classes.
  • Next screen is sign up and onboarding. If you have an existing Schwab account, you can login with your id and password.

Personalized Low Cost Automated Investing Sustainably ~ Sutainfolio

The asset allocation of a Sustainfolio investment portfolio is like any diversified investment portfolio. The difference lies not in the asset classes, but in the investment funds. Every fund is comprised of socially responsible companies.

Ally Invest Robo Portfolios

Ally Invest Robo Portfolios is an Ally Bank-affiliated automated investing platform. This robo-advisor investing service keeps 30% of clients cash aside to protect them against the markets unpredictable risks.

The minimum investment of $100 makes this service accessible to all investors and offers several benefits with low or no fees.

Ally Invest Robo Portfolios includes two account options: cash-enhanced account and market-focused account. The cash-enhanced option charges no management fee and is ideal for conservative investors.

The service invests 70% of your accounts value in a portfolio of ETFs and keeps the remaining 30% in an account similar to a high-yield savings account. In comparison, the market-focused portfolio charges a 0.30% annual advisory fee and invests around 98% of your accounts amount.

Ally Invest is valuable for investors looking to take the guesswork out of their investments and begin their investment journey with a minimum balance. It is also for people who seek competitive fees.

Ally Invest Robo Portfolios Investing Details:

Account Minimum: $100. Annual Management Fees: 0% for the Cash-Enhanced Managed Portfolio0.30% for Market-Focused Managed Portfolio Supported Account Types: Individual & Joint Investment Accounts Traditional & Roth IRAs Custodial Accounts.

Also Check: Short Term Investments Assets Or Liabilities

Who Benefits From The Ally Invest Robo Portfolios Robo

If youre wondering, Who should consider Ally Invest Robo Portfolios, heres your answer.

The Ally robo-advisor might be a fit for investors who lack either the experience or the motivation to manage their own investments. Youll have the opportunity for professional investment management at a fraction of the cost for traditional human investment managers.

If you are willing to hold a 30% cash allotment in your portfolio, invested in a high yield cash account, then there are zero account management fees.

For those who prefer a lower cash allocation the advisory fee is 0.30%. This means that a $100,000 portfolio can be professionally managed for zero management fees with a 30% cash allocation or $300 per year with a lower or no cash allotment. This is in the mid-range of the robo-advisor fee spectrum. You will find lower management fees at Betterment, Wealthfront, and Schwab Intelligent Portfolios.

And beyond the robo-advisor service itself, working with Ally gives you direct access to Ally Invest for self-directed investing, and Ally Bank, for both high interest savings accounts and innovative loan programs.

If you want 24/7 phone customer service then the Ally Invest Robo Portfolios might fit the bill! The chat and email access round out the accessible customer service.

Wealthsimple Vs Rbc: Sign

Best Robo

Signing up for both RBC Investease and Wealthsimple Invest is easy. All you need is your SIN, address, and banking information. Youll be taken through a questionnaire that helps them pinpoint your financial goals, timeline, and risk tolerance, and select the right portfolio for you.

Once youre all set up, all you need to do is fund your account.

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How To Use A Robo

The process of setting up an account with pretty much any robo-advisor begins with a questionnaire. This way the service gets to know what the account will be used for and the level of risk youre comfortable with.

With some robo-advisors, the process involves an interview or text chat with one of their live representatives. After that, the algorithms get to work, deciding which of a selection of portfolios to place you in. You transfer money into the account and away you go.

Generally, robo clients dont have to worry about trading feesany rebalancing or changes in the portfolio are covered by the portfolio management fee. In most cases this fee is separate and additional to the underlying management expense ratio charged by the ETFs themselves.

Between the robos and the ETFs fees, you shouldnt end up paying more than 1% per year for the management of your investmentsthat compares to an average of more than 2% for mutual fundsunless you opt for a robo and account offering investments other than ETFs. The latter typically come with higher fees, as noted in the profiles of the different providers above.

If youre considering setting up an account with a robo-advisor, look on the providers website for performance data for the kind of portfolio you expect to set up. If its not posted, request it. You want to feel comfortable that the robo has a history of capturing the kinds of returns it promises: and you need to achieve your goals.

Ethical Investment In The Uk

In 1985, Friends Provident launched the first ethically screened investment fund with criteria which excluded tobacco, arms, alcohol and oppressive regimes. Since 1985, over 90 investment funds have launched offering a wide range of investment criteria both negatively screened and with positive investment criteria i.e. investing into companies involved in promoting sustainability.

Since 1985, most of the major investment organizations have launched ethical and socially responsible funds, although this has led to a great deal of discussion and debate over the use of the term “ethical” investment. This is because each of the fund management organizations tend to apply a slightly different approach to running their funds.

In recent years there has been growth in the market for high social impact investments this is a style of investing where the businesses receiving investment have social or environmental goals as a primary purpose.

UK institutions are also getting more involved in social investing through impact investing funds, with those such as Deutsche Bank and NESTA, alongside other institutions such as Big Issue Invest, which is part of The Big Issue group.

As of June 2014, EIRIS estimated that there was over £13.5 billion invested in Britain’s green and ethical retail funds. This estimate is based on around 85 UK domiciled green or ethical retail funds and it seeks to not include UK money invested in ethical funds domiciled outside of the UK.

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What Are Sustainfolios Investment Minimums And Fees

Sustainfolio requires a minimum $5,000 investment amount. Smaller investors seeking socially conscious investing might check out the Betterment socially responsible investing on their website.

The annual management fee is .50% of assets under management. So, if you have $5,000 invested, then your annual fund management fee would be $25.00 or a bit more than $2.00 per month. Additionally, like all robo-advisors the individual ETFS charge small management expense fees that go directly to the fund company.

What’s A Robo Advisor

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A robo-advisor is a digital platform that allows for money to be invested on auto-pilot. Robo-advisors normally invest money in broad portions of the stock market rather than an individual choosing the stocks to by and sell by themselves.

Robo-advisors typically have you answer a few questions to determine your appetite for risk. Then, through the use of proprietary algorithms, they spread your money into appropriate investments, making adjustments as your situation and the market change. When you open an account with a robo-advisor they typically collect between 1% less in fees than a professional investment advisor. They can charge lower fees as they generally dont have brick and mortar branches like most other financial institutions and they automate a lot of manual work.

When you open an account with a robo-advisor there are many advantages. The main one is lower fees. Lets say youve got a nice nest egg of $50,000. A professional investment advisor charges in the region of 1% fee. Thats $500 every year whether your portfolio goes up or down. Plus, their portfolio recommendations might include pricey mutual funds and lots of stock trading, both of which can eat into returns.

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