RSS Facebook Twitter LinkedIn
 


Featured Advisor



Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management

City:Northbrook

State: IL



BIOGRAPHY:
At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

Click to see the full profile


Share |

Socially Responsible Investing for the Middle Class

 The California company Aspiration connects investors on a tight budget with socially responsible investments.   

| BY Kent McDill

There are companies that promote their social responsibility as a draw to investors who want to do something positive with their money while making more money. But some companies merely say they are socially responsible, while others take that responsibility seriously.

How can investors tell the difference? Ask Aspiration.

Aspiration is an investment advisor company based in California and aimed at middle-class Americans who want to get into the investment game but want to do so in a socially responsible manner.

Aspiration has joined with the long-standing naturalist organization Sierra Club to determine firms and mutual funds that have strong ties to environmental, social and governance (ESG) issues to promote to middle-class investors.

“It’s kind of backwards, because sustainable investing is actually even more skewed toward the wealthiest in our country than investing overall,’’ said Aspiration founder and CEO Andrei Cherny in an interview with Business Insider.

Socially responsible investing is not an overly popular form of investing principle, but it is a growing one.

According to Spectrem’s recent Perspective Investor Perceptions of Socially Responsible and Impact Investing, the younger and less affluent investors are more likely to take into consideration the social responsibility of a firm in which they are looking to invest. Twelve percent of all investors say between 25-49 percent of their portfolio is invested in firms that claim social responsibility.

There are a couple of large Wall Street firms that have opened special investment products aimed at ESG, but Aspiration is looking for firms that will appeal to middle-class investors who cannot or do not want to open accounts with six-digit balances.

“Three-quarters of the people who open an Aspiration account have no other investments when they first come to us,’’ Cherny said. “That’s not necessarily because they don’t have access. It’s because they don’t feel there is financial products and financial firms that really share their values.”

Last year, Aspiration joined with UBS Asset Management to create the Aspiration Redwood Fund, which invests in companies with a focus on environmental, workplace, social and governance sustainability practices. Those firms are vetted by the Sustainable Accounting Standards Board.

The Aspiration accounts can be opened with a minim deposit of $500. The fees range from zero to 2 percent, and Cherny said account holders are invited to pay fees only when they deem it appropriate to do so.

“The customer decides what to pay us and well over 90 percent of our customers pay us a fair amount,’’ Cherny said. “I think that speaks to the fact of the different kind of relationship we’re building with clients and customers.”

The firms Aspiration and Sierra Club are looking for are ones that have a long-term view of socially responsible activity, as well as though that are free from connections to tobacco production, fossil fuel extraction and firearms.

“We are excited to work with Aspiration to bring sustainable investing opportunities to our members,’’ said Sierra Club executive director Michael Brune. “We see it as another form of activism, one that lets our members push more companies to adopt environmentally friendly practices partaking in the rising profits of those that already do.”

“The real impact of sustainable investing is going to be when the big players in our economy start feeling real pressure to think long-term, to think about the planet, to think about their own people,’’ Cherny said. “That’s when the real change happens.”

In an interview with the San Francisco Chronicle, Adam Rifkin, co-founder of a startup business named pandaWhale.com, said he invested the minimum with Aspiration and saw an immediate 6 percent return. He plans to keep those fun ds where they are.

“They have tapped into something that is more appealing for somebody like me because of the values of the companies they invest in,’’ Rifkin said. “Whenever I tell people in their 20s and 30s about Aspiration, the values really resonate with them. Younger people are looking to invest with a company that inspires them. An investing institution that puts its values first is rather unique.”



About the Author


Kent McDill

kmcdill@spectrem.com

Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.

In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.

McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.

McDill is the father of four children, and an active fan of soccer, Jimmy  Buffett and all things Disney.

 


 

Comments