Want to get your feet wet in the wonderful and eco-conscious world of socially-responsible investing? You’re not alone. Back in the day, impact investing was only available for big-money investors who are willing to invest large amounts.
But we are now in the realm of environmentally-friendly living. Non-biodegradable synthetic plastics are now commonplace in the Earth’s most beautiful oceans. Despite what naysayers may say, climate change is here to stay. The blazing hot summers and irregular frigid winter are, sad to say, just the tip of the (disappearing) iceberg.
We all need to be more responsible for our actions, which include our investing activities. The best socially-responsible Robo Advisors will help you to be a more eco-friendly investor without the high risks and huge fees. Want to invest in socially conscious stocks in the world of alternative energy, disease eradication, or healthy living? We have answers for you right here.
Are you new to the world of automated investment services? Are you a seasoned investor and want to give impact investing a shot? Here are the best green Robo Advisors that will make it easy for you to start.
Get to Know Your Money
Personal Capital is one of the best hybrid robo advisors offering SRI services. The company’s been offering socially responsible investment options since 2012. And now, Personal Capital is taking it a step further by partnering with Sustainalytics, a global leader in corporate governance research and rating history. The result of this partnership is the creation of new evaluation metrics to accurately determine the social responsibility of a company.
The three main pillars are ESG which stands for Environmental, Social, and Governance. This new methodology measures and assesses the ESG issues that are material to each company. With this approach, Personal Capital’s Socially Responsible Personal Strategy does a better job of seeking out companies which are doing a better job in managing environmental, social, and governance issues (ESG).
Personal Capital offers an amazing free service inclusive of a fee analyzer, education planner, retirement planner, budgeting/cash flow, and investment checkup. The paid service requires a $25,000 minimum deposit but you also get a dedicated financial advisor along with automatic rebalancing and tax loss harvesting.
Investing on Autopilot
Wealthsimple is a very good choice for impact investing. Wealthsimple is fully-automated and easy to use, which makes it a bland choice for hands-on investors, but the Robo Advisor comes with a $0 account minimum and will offer free portfolio rebalancing and tax loss harvesting for all accounts.
If you sign up to Wealthsimple using our link, your first $10,000 investment will be managed for free! There’s no catch; just sign up using our link and your first $10,000 investment will be managed free of charge!
Wealthsimple is a traditional Robo Advisor. It offers the usual SEP IRA, traditional IRA, Roth IRA, and Rollover IRA accounts. But it also offers halal-based investing opportunities along with socially-conscious or green stocks. The Wealthsimple Basic service will charge zero advisory fees for the first year and will only cost you 0.50% for accounts above $100,000.
Although Wealthsimple is not intended for hands-on investors, it remains a solid choice in the world of eco-friendly investing.
EarthFolio is a smart and low-cost option in SRI automated investing. This Robo Advisor is unique because it allows you to invest exclusively in companies with strong ESG or Environment, Social, and Governance practices.
This includes clean energy, conservation, equal employment, diversity in hiring, financial transparency, and board independence. It is free to open an EarthFolio account and the service charges a modest annual fee of 0.50%, although the service does have a relatively high $25,000 minimum investment.
EarthFolio has been investing exclusively in the ESG investing space for nearly twenty years and have the distinction of being the first advisory firm to offer ESG robo services. They have a wide lineup of fully diversified ESG portfolios, including a line of fossil-free portfolios which exclude coal, petroleum, and natural gas (a rarity even within ESG competitors).
Invest for Life
Polaris Portfolios is a fully-automated Robo Advisor, making it an excellent choice for hands-off investors. It does, however, require a higher minimum deposit and comes with slightly higher management fees as well. But the service will charge zero trading fees and transaction fees, and you can open multiple investment accounts.
Polaris also offers unlimited email support to offer added peace of mind. But Polaris is also known for offering values-based portfolios. This will give you the chance to put your money on green companies and socially-responsible endeavors that focus on sustainability and positive social impact.
Even though Polaris isn’t the best choice for small investors, the service is an easy way to experience the finer points of responsible investing.
More Green Robo Advisors for Impact Investing
In addition to our favorites above, there are a number of other Robo Advisors that offer socially-responsible impact investing options.
Betterment has recently unveiled socially responsible investing choices that clients can easily select and add to their existing portfolio. The SRI portfolio of Betterment is composed of ETF’s from iShares, with more SRI funds to be integrated in the near future. Betterment claims that socially responsible investing is an $8 trillion category as more and more clients are demanding the availability of SRI approaches in their investment activities. Betterment is already one of the best Robo Advisors that offers superior flexibility with no minimum deposit.
Wealthfront is also opening new doors in socially responsible investing. Existing clients can now remove any security that doesn’t fit the mold of ethical investing. Prime examples are securities in the fossil fuels, weapons, tobacco, and deforestation industry. Any client of Wealthfront that qualifies for Stock-level Tax-Loss Harvesting or Smart Beta can tell Wealthfront which companies they do not want to invest in. While Wealthfront’s options for impact investing are lacking compared to many other Robo Advisors, we’re glad to see they’re at least making some sort of effort. We’d like to see more options from them in the near future.
OpenInvest is also an SRI Robo Advisor that offers investment portfolios with a powerful social impact. The service starts by answering a questionnaire on the causes that you are passionate about such as taking down big tobacco, fighting guns and violence, reducing carbon emissions, or protecting global forests. The service will automatically build and manage a diversified portfolio while giving you updates on your social impact. OpenInvest only requires a minimum deposit of $100 and will charge a 0.50% annual fee.