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Want to grow your money without worrying about where it’s invested? You’re not alone. More people are looking for ways to align their investments with their values, supporting clean energy, ethical companies, and a healthier planet while still building wealth.
But let’s be real, figuring out the best socially responsible investments can feel like a full-time job. That’s where ESG and SRI robo advisors come in. They take the guesswork out of impact investing, helping you put your money where your heart is without the stress.
Ready to invest with purpose? Here are the top robo advisors making it easy:
- Very Easy to Use
- Low Annual Fee (0.25%)
- Socially-Responsible Portfolios
- Excellent Financial Planning Tools
- $5,000 Managed Free (with our link)
- Wide Variety of SRI Portfolios
- $4/month or 0.25% - 0.40% Annual Fee
- No Minimum Investment
- Access to Human Financial Advisors
- Excellent Banking Features
- 0.49 - 0.89% Annual Fee
- Built-For-You ESG Portfolios
- Only for High-Net-Worth Investors
- Great Free Personal Finance Dashboard
Cost: 0.25% ($5,000 managed free with our link)
Pros:
- Low management fee
- Tax-loss harvesting
- Automated investment portfolios management
Cons:
- Limited customization options
Wealthfront’s ESG Portfolios are super low cost, with a 0.25% management fee. This is perfect for those who want to grow long term without being weighted down by high costs. Wealthfront also offers tax-loss harvesting and automated investment portfolio management, using Blackrock funds focused on ESG factors. The minimum to get started is $500 so it’s accessible to most investment portfolios.
Wealthfront is great for beginners in socially responsible investing who want to minimize costs. But it’s limited customization options may not suit experienced investors who want more tailored portfolios.
Overall, Wealthfront offers a balanced approach to ESG investing, so you don’t have to sacrifice returns for social impact.
Cost: $4/month or 0.25%
Pros:
- Broad range of SRI focused portfolios
- Strong performance data
- Emphasis on social impact and diversity
Cons:
- Higher fees compared to some competitors
- Limited transparency on specific fund holdings
Betterment’s Socially Responsible Investing Portfolio is for those who want a comprehensive SRI. The platform selects funds that increase exposure to companies making positive social impacts while reducing exposure to unethical companies.
Betterment’s socially responsible portfolios incorporate ESG alternatives and provide performance data showing returns equal to or better than their Core offers. The Broad Impact portfolio for example focuses on ESG factors such as ethical labor practices and diversity on corporate boards.
Betterment offers a range of SRI specific portfolios, including the Social Impact portfolio that focuses on US companies committed to diversity. But the fees are slightly higher compared to some other robo-advisors and there is limited transparency on the specific fund holdings. Despite the drawbacks, Betterment is a strong contender for those looking for a robust SRI portfolio.
Cost: 0.49 – 0.89%
Pros:
- Personalized financial planning
- Emphasis on ESG factors
- Tax management and disciplined rebalancing
Cons:
- High minimum investment of $250,000
- High management fees
- Not suitable for small investors
Empower (formerly Personal Capital) is one of the best hybrid robo advisors offering SRI services. Empower targets high-net-worth individuals by offering personalized financial planning and investment dollars services. The platform’s socially responsible investment strategy emphasizes environmental, social and governance (ESG) factors using a combination of exclusive and inclusive stock filters.
Empower offers a range of personalized strategies for high-net-worth clients including tax management and disciplined rebalancing. But the minimum investment for a personalized socially responsible strategy is $250,000 so it’s not for small investors.
Empower is perfect for high-net-worth individuals looking for a customized approach to socially responsible investing. Personalized financial planning and ESG focus are big pluses. But the high minimum investment can be a barrier for many.
Despite that, Empower’s focus on high-net-worth individuals means the services are top notch and highly customized.
Cost: $3/month (if your balance is less than $10,000)
Pros:
- Highly customizable portfolios
- Aligns with individual ESG values
- Uses a pie portfolio model
Cons:
- Requires more hands-on management
- Limited guidance for beginners
M1 Finance is great for investors who want to create custom portfolios that match their social responsibility values. The platform uses a pie portfolio model so you can allocate funds according to specific ethical criteria or personal values. This level of customization is perfect for those who want to take a hands-on approach to ESG investing.
M1 Finance is for socially conscious investors who want flexibility in designing their portfolios. Its customization options offer a highly personalized investment experience. But it requires more hands-on management which might be overwhelming for beginners.
Also, the platform offers limited guidance so it’s best for those who are already familiar with ESG investing.
EarthFolio
Cost: 0.50%
Pros:
- ESG only investments
- Strong environmental focus
- Broad range of ESG mutual funds
Cons:
- Higher fees
- ESG-only investments
Earthfolio is for those who want ESG-only investments, focusing on environmentally sustainable investments. The investment strategy is centered on a broad range of ESG mutual funds so all investments are aligned with strict ESG criteria. Good for socially conscious investors.
Earthfolio is great for those who want to invest only in ESG-focused funds. Its strong environmental focus differentiates it from other robo-advisors. But the higher fees and limited investment options might be a con for some.
Despite that, Earthfolio’s ESG commitment makes it a standout for dedicated socially responsible investors.
To choose the best socially responsible robo-advisor for you, you need to know your values and investment goals. Socially responsible investing means avoiding investments in undesirable industries or practices. Start by summing up what matters most to you, whether it’s environmental sustainability, social justice, or corporate governance.
Look at the fees and features of each robo-advisor. Fees can be as low as 0.25% or even free, but vary from platform to platform. Check for tax-loss harvesting, automatic portfolio rebalancing, and range of ESG funds. Customizability is also key; some platforms like M1 offer a lot of customization while others like Wealthfront have more standardized portfolios.
Do your due diligence. Research the companies in the portfolios. Socially responsible investing is a good effort but not without its challenges. Companies can change their practices which can affect their social responsibility status. Robo-advisors like Betterment act as fiduciaries and prioritize their clients’ best interests, which is a big plus. Socially responsible investment firms also play a big role in guiding investors towards ethical choices.
Ultimately, the best socially responsible robo-advisor for you will align with your values, financial goals and investment preferences. As impact investing grows, taking the time to choose the right platform will ensure your money works towards a better future.
Summary
Socially responsible robo-advisors offer a great way to align your investments with your values. Wealthfront is great for low fees and ease of use, making it accessible to almost every investor. Betterment has comprehensive SRI portfolios for those who want broad impact. Empower caters to high-net-worth individuals with personalized strategies, while M1 has unmatched customization options. Earthfolio is the gold standard for ESG-only investments.
Choosing the right robo-advisor is important for financial returns and social impact. By knowing your values, comparing features, and doing your due diligence you can find the platform that fits your needs. Be confident in the future of investing and make your money a force for good.
FAQs
What is socially responsible investing?
Socially responsible investing is all about choosing investments that reflect your values, focusing on ethical, social and environmental considerations. It’s a way to make your money work for good!
Are the returns from socially responsible investing the same as traditional investments?
Yes, returns from socially responsible investing can be the same or similar to those from traditional investments. Many studies show that investing with a conscience doesn’t mean sacrificing financial performance.
What are ESG funds?
ESG funds invest in companies that put environmental, social and governance factors first, so you can invest with your values!
Are there minimum investment requirements for socially responsible robo-advisors?
Yes, many socially responsible robo-advisors have different minimums; Wealthfront is $500, while Empower is $250,000 for personalized strategies. Check what fits your budget!
How customizable are socially responsible robo-advisors?
Socially responsible robo-advisors can be quite customizable with options like M1 that lets you customize your investment portfolio to match your values. So if you want to make a personalized impact with your investments there’s definitely room to do so!
