How to find an Ethical Financial Adviser (UK)
Useful, practical tips on finding an ethical financial adviser. What I mean is an adviser that specialises in investing ethically or investing in line with your values - there are many labels for that now as more and more investors consider sustainability to be one of their main priorities in life. I will just use ethical as a label for simplicity.
As money decisions involve some of the most important decisions you might ever make in life, then a financial advisor that will take what is important to you, with values seriously, is quite valuable. Investing sustainably as a strategy - whether via ESG focus, Impact Investing or using traditionally screened funds is showing significantly better returns than conventional funds too. If you don’t believe me, it's good to be sceptical, do your research and I will link some articles for you to read in the description below.
How do you find the right advisor for you?
There are plenty of ways. But first, you need to ask yourself if you even need a financial advisor at all. A quick decision funnel is using the willingness and capacity test - which I learned via a wonderful person called Miki Kashtan.
If you are earning regular significant sums and don’t feel like you have the free time to manage these then a financial advisor may well be for you. A lot of people feel they can manage it themselves and to be honest, they very well can. It is not rocket science. However, if you're dealing with money that gives you anxiety or you find yourself procrastinating and not making a decision, having an advisor would give you momentum for action and peace of mind. If you feel confident managing your money and you have the willingness and capacity in times of time & energy to do it then go for it.
So, finding an adviser, where do you start?
Like most things, recommendations are a great starting point. Ask friends and relatives you trust, if they’ve used a financial advisor they liked in the past. Think of those that have needed to invest recently and ask if they went down the ethical route.
If no one fits the bill, then don’t worry, you can always consult ethicalinvestment.org.uk. Or you can also look it up as your first port of call!
This is the home of the Ethical Investment Association and offers a group of Independent Financial Advisors who, are "keen to offer green and ethical investment advice to their clients" and when I last checked, there were around 60 advisers. Now, with online meetings, if the adviser works that way, you can contact anyone across the UK. So, there is quite a lot of choice. The EIA was founded in 1998 and is now a sub-group of UKSIF, the UK Sustainable Investment and Finance Association.
Once you’ve narrowed down a few advisors, it’s down to you to choose the one you want to go with. It's important to meet 3 or 4 different advisers as with each meeting, you get clear on your criteria.
Most advisers offer an initial meeting at their cost. There is no advice given necessarily at the meeting - although it is useful to ask questions, get a sense of what solutions are offered, cost etc. For the cost, remember pricing is difficult till an adviser is clear on the amounts involved, various wrappers, transfers if needed and complexity of work. So, the more you can be clear going to a meeting, the better. Although don’t worry, a lot of times client’s aren't’ clear and the adviser will ask enough questions to help scope out the work.
Make sure that you ask all your prospective advisors to confirm that ethical or sustainable investing is their specialism; if you find they persuade you to invest otherwise, just find a different adviser. Once all's said and done and you’re happy you’ve done enough research into your shortlist then it might just be a matter of going with your gut feeling of who seems right.
So make sure you need an advisor, if you do then ask around, consult the EIA, then make a shortlist of potential ethical advisors, finally do your research to pick the best one for your needs.
Good luck in your search!