Sustainable & Responsible Investing Continues to Grow at Remarkable Pace


US SIF, the Forum for Sustainable and Responsible Investment published their biennial 2018 Responsible and Impact Investing Trends today. As we have been expecting, the amount of investments categorized as being sustainable and responsible has grown considerably since the last report back in 2016. Earth Equity Advisors has been a member of US SIF for over fourteen years.

Sustainable and responsible investing in the US has grown to $12 trillion from $8.7 trillion in 2016. That’s a 38% increase and now accounts for just over ¼ of all investments under professional management in the US.

Earth Equity advisors has seen asset growth of 60% plus over the last two years. “It’s exciting to see our industry to continue to grow at this rapid pace and even more exciting to see Earth Equity bettering the industry’s growth,” said Earth Equity Advisors’ CEO & Director of Investments, Peter Krull.

The report also catalogs the more than 700 shareholder resolutions filed relating to environmental, social and governance issues during the 2018 proxy season. “Shareholder advocacy continues to be a good strategy to push companies to be better and truly helps Earth Equity to fulfill our mission to empower our clients to be changemakers,” Earth Equity Advisors’ Partner & COO, Neill Yelverton said. The top issues raised were proxy access, corporate political activity, climate change and labor and equal employment opportunity.


For more information on the US SIF report, visit the organization’s website for an executive summary of the report.


Speaker Series Recap: Diversity & Inclusion Takeaways

Reversing Global Warming: A Conversation with Katharine Wilkinson and John Sutter

We’re gearing up for our 4th annual Lecture Series, and we couldn’t be more excited about our guests this year.

You’re invited to join us for a special evening at The Collider in downtown Asheville with acclaimed author Katharine Wilkinson and CNN columnist John D. Sutter as we discuss climate change, challenging assumptions and taking action through established solutions and new ideas.

This one-time event will include a panel talk by our guests, moderated by Earth Equity Advisors’ CEO Peter Krull, and followed by a Q&A session. Light refreshments will be served.

Katharine Wilkinson

Katharine Wilkinson

Katharine Wilkinson is the senior writer of the bestselling book, Drawdown, edited by Paul Hawken. She is also the author of Between God and Green. Her background melds research, strategy, and thought leadership on climate action. Katharine holds a D.Phil. in Geography & Environment from Oxford University and a B.A. in Religion from Sewanee.

John Sutter

John D. Sutter is a senior writer and columnist for CNN. He is the creator of the network’s “2 Degrees” project, which aims to involve readers in climate change coverage. He has received the Livingston Award and the Batten Medal for public service. His work has also been honored by Online News Association, Foreign Press Association, Investigative Reporters and Editors, among others.

This is a free event. Seating is limited.

When: Doors open at 5:30 pm, with light refreshments available, and the talk starts at 6:00 pm.

Where: The Collider, 1 Haywood St Asheville NC 28801

Who: Katharine Wilkinson and John Sutter, brought to you by Earth Equity Advisors

Special thanks to our sponsors:

The Collider

Ray C. Anderson Foundation

Blue Ridge Public Radio & WCQS

JB Media Group

Big Path Capital

Clement Law Firm

Mountain Bizworks

Green Sage Cafe

The Long and Short of Socially Responsible Investing

With the rise of companies engaging in socially and environmentally responsible business practices—fair trade partnerships, living wages for all workers, utilizing sustainable manufacturing and harvesting practices to name a few—debates have risen about what impact our investing strategies have. Is it just as good to invest in a company that donates a little bit of profit to charities every year as it is to choose a company intent on growing their triple bottom line? (Triple bottom line companies focus on financial, environmental, and social outcomes.) Are there short or long-term benefits to one over the other?

Let’s look at two supermarket chains as an example. Ingles Markets provides $1000 scholarships to high school graduates who are employees or children of employees at any of their stores. This can be called an investment in the next generation, ensuring a means to a college education for young people who may not otherwise have the assets for tuition and housing. It fosters goodwill in every city where an Ingles Market is located, which prompts investment in the chain with investors knowing their money supports a company that’s interested in the future. But is awarding scholarships, or donating a portion of profits to local or national charities, the best the chain can do?

In the short-term, such investment in a company like Ingles Markets has a positive impact, but some argue it isn’t enough. In contrast, the Whole Foods Market chain strives to forge partnerships with suppliers in poor third world countries to facilitate fair trade and sustainable farming practices while bringing nutritious foods to underserved portions of the US. This is more than a profit making decision. It’s a boost to the company’s core values by widening their influence for the benefit of populations who need the most help. While it sometimes does make the products in Whole Foods Markets more expensive for the consumer, the chain’s success over the last decade proves sustainable practices that grow a company’s triple bottom line are attractive to consumers and investors alike.

“This is more than a profit making decision. It’s a boost to the company’s core values by widening their influence for the benefit of populations who need the most help. ”

The winds of change have driven many companies to behave in a more responsible manner, not just for their financial growth, but also for the benefit of the environment and society as a whole. Investment in socially and environmentally responsible companies is on the rise, currently a $20 trillion dollar industry. Studies have shown companies that cared about social and environmental responsibility had better operational efficiency, lower cost of capital, and better stock price performance.

Can a company that doles out scholarships or charitable donations compete with companies that reach farther and wider in their fair trade, sustainable, and environmentally conscious efforts?

Investing in companies that understand the value of giving to the communities in which they do business is not a bad choice if you’re looking for short-term impact. But for how long will that strategy remain competitive? As the emphasis on the worldwide impact of business rises, triple-bottom-line companies can convince investors they’re in it for the long haul, and not just for the next generation, but the ones that follow.

Interested in responsible investing for the long term? We can help. Contact us for a complimentary consultation.

Do You Need a Robo-Advisor or a Human Financial Advisor?

Society moves at a breakneck pace these days. Smartphones have given people access to virtually any information they want regardless of their location or time of day. With financial planning needs changing in seconds and people wanting information instantly, robo-advisors are being implemented more and more.

Which type of advisor is right for you?

A financial advisor’s role is to help you live the life you choose, whether that involves a big family with lots of college tuition down the line, early retirement, property investment, world travel, or more. Robo-advisors put your portfolio at your fingertips, giving you a snapshot of your investments in an instant.

A robo-advisor puts control of your future in your hands more than ever before. With the ability to make changes to your plan, you can make your money work for you using a robo-advisor. However, just because you can make swift changes to your strategy doesn’t mean you should, and which is where a human advisor comes in.

It Depends On Your Stage in Life

Much of the human advisor versus robo-advisor decision depends on your stage in life. If you’re just starting out as an earner and have only a small amount of investment capital, a robo-advisor, with its lower fees and more hands-on approach, could very well be the best option for you.

Young or first time investors are typically used to the technological savvy required to manage their own investment strategy, so a robo-advisor may feel more comfortable. Using a robo-advisor provided by an investment firm allows for a DIY approach with the safety net of a human advisor should questions arise. An initial meeting with a human advisor can help them understand the full impact of their investments through both the immediate and long-term future. The lower fees and transparent pricing of a robo-advisor may also be attractive for a group without a lot of assets (or rapidly building assets). As time goes on, the robo-advisor becomes an essential tool, giving them more flexibility to drive their portfolio themselves and make adjustments on the spot.

Another group to benefit from a robo-advisor are the savers, looking to build their portfolio for the golden years. This group is generally climbing the corporate ladder and balancing college tuition for their children. Because needs can rapidly change at this level of investment, there are sometimes questions better answered by a human advisor. A robo-advisor may give more control over the investment options, but a human advisor can answer questions pertaining to more dynamic investment considerations. Talking about money isn’t just about money, and a human advisor can tailor a plan that answers unquantifiable questions like how do I plan for an adventure trip of a lifetime or purchase the mountain cabin where I want to live out my retirement years?

“While a robo-advisor alone puts more control in the clients’ hands, there are still situations where a human advisor is a better voice in your corner, with their expertise and ability to think dynamically to plan your strategy. ”

While a robo-advisor can give easy access to the state of their investments, those who are high earners but not rich yet should have a human advisor who can answer questions revolving around taxes and alternate income streams. A robo-advisor is helpful for quick changes and immediate control over the portfolio, but for someone with quite a lot of investment capital, a strategic plan with a human advisor’s expertise can be more beneficial, keeping the robo-advisor as a single tool in an arsenal of tools to best manage the portfolio.

Those at the pre-retiree/post-retiree point in life are less likely to benefit from a robo-advisor over a human one. Plans that have been years (or even decades) in the making benefit from the human touch to ensure everything’s on track. Life can surprise us, and if that happens after retirement, a human expert can produce a creative solution to minimize any setbacks where a robo-advisor can only inform of the setback’s consequences. Keeping the road smooth through retirement years takes investment savvy and creativity that perhaps cannot be duplicated by a computer.

For those who’ve come into an inheritance, are named in a trust, or have gained a windfall through other circumstances will benefit most from a human advisor who is experienced with planning and executing an investment strategy around these specific life events. Such advice can cover questions around taxes, disbursements quantity and frequency, and can mean the savings of thousands of dollars in penalties if not properly handled.

A human advisor can offer advice on this and much more, as well as recommend investments that fit the clients’ social consciousness. While a robo-advisor alone puts more control in the clients’ hands, there are still situations where a human advisor is a better voice in your corner, with their expertise and ability to think dynamically to plan your strategy. A robo-advisor opens many doors to the understanding and control over one’s investments. Be sure to research carefully which option most fits your needs. Perhaps the answer for you lies with a combination of human expertise and the flexibility and control with a robo-advisor that gives the most value and peace of mind for a future lived the way you choose.

Set up a consultation with us to discuss your sustainable investment options.

Questions You Need To Ask Your Potential Financial Advisor

Finding a financial advisor can be fraught with uncertainty. You want to seem knowledgeable about your financial picture, but the whole point of finding an advisor is to take advantage of expertise you don’t have. The trick to finding a good advisor—one who will help guide you through choosing the best investment plans for you—is to ask the right questions up front.

Here are ten questions to help you on the road to building a solid relationship with an advisor you can trust and who will have your best interests at heart.

1.      Are you a fiduciary? “Fiduciary responsibility” means the advisor is required to put the needs of the client first, above and beyond any benefit they might enjoy as a representative for a particular investment or fund. Even though an RIA is not legally appointed, they are held to the legal fiduciary standard, and as such, are required to spell out any potential conflicts of interest during your initial meetings.

2.      What are your licenses, credentials, or certifications? This determines whether the advisor offers the services you desire. Do you just want investment planning help, or are you after a full retirement plan, including tax and estate planning? These answers can help you choose with whom to meet and work with in the long term.

3.      How are you compensated, including soft dollars? Soft dollars, in the RIA world, are monies and/or services provided by the custodian which may not be related to product sales. If you are not dealing with a fiduciary, the recommendations can change to be of more benefit to the broker than the client. The fees need to be transparent, and compensation can vary greatly. Make sure you know what to expect, because the idea that advisors only make money when their clients make money isn’t always the case.

4.      What types of clients do you specialize in? Sometimes advisors have a niche, and if that matches with your investment and planning needs, a stellar relationship can be born. The more aligned your advisor is with your values and interests, the stronger your plan can be to the benefit of everyone.

5.      What is your investment approach? If you’re interested in frequent buying, selling, and trading, and the advisor with whom you’re meeting is more inclined for the slow and steady approach, chances are you aren’t a good fit. Aligning yourself with someone who matches your risk threshold provides a foundation for a plan you can trust, with no nasty surprises six or twelve months down the road. Find out your investment personality with our free Financial Identity Quiz.

6.      How much contact do you have with your clients? If you’re interested in a more hands-on approach, and your advisor is expecting to meet with you once a year, you could end up feeling ignored. On the other hand, your advisor may take your more frequent phone calls as a sign you don’t trust him or her. Even if you don’t know yet how often you will need an update on your financial picture, getting guidance from your advisor at the right frequency helps you feel empowered for your future.

7.      Will I be working with you or your team? Perhaps your advisor has a team whose strengths and personalities are a good match for you, or cover more specialties than one individual by themselves. This can be good for flexibility, but knowing this up front can save frustration. Awareness of whom you’re dealing with can stave off feeling brushed aside if you’re expecting to talk to one advisor only to end up with someone else in the office.

8.      Can you explain (without breaking confidentiality) why the last two clients left your firm, and tell me about one you let go? This is a two-way street. Knowing the deal breakers can help you avoid becoming the nightmare client an expert isn’t pleased to be working with. Insight into why they lost previous business can help you understand where things sometimes just don’t work out. This is a tough question to ask, but it can teach you about what that advisor values most.

9.      How did you handle the Great Recession and the aftermath of 2008?  A lot of people pulled investments when the housing bubble popped, which contributed to the recession much like an avalanche gathers more snow as it slides ever downward. An advisor who was able to weather the storm to mitigate losses for their clients has some stories to tell, and if you give them a listen, you’ll be able to assess their reactions when things aren’t always going so well in the market.

10.  Is there anything in your regulatory record I should know about? This question is difficult to ask, but it’s absolutely necessary. There are ways to research this on your own, such as visiting the IAPD on the Securities Exchange Commission website, FINRA, and other regulatory boards, such as the CFP Board. However, gauging the answer from the advisor themselves is the best way to get a read on any red flags that are imperative to making your decision.

Your relationship with a solid, reputable advisor can become one of the strongest, most important relationships of your life. It can mean the difference between looking forward to your future or worrying about it. These questions can help ensure your portfolio—and your future—are on the upswing.


Saving the Oceans, One Garbage Patch at a Time

The biggest landfill in the world isn’t actually on land.

It’s in the Pacific Ocean, floating between California and Hawaii, and it’s known as the Great Pacific Garbage Patch. Current estimates conclude it’s the size of Texas. It’s also not the only one of its kind, though it is by far the largest.

What Is a Garbage Patch?

A garbage patch in the ocean is the natural gathering point of trash and plastics where rotating currents and winds converge to create a vortex of trash, known as a gyre. Over time, the plastics break down to smaller particles, just a few millimeters. These float on or near the surface of the ocean much like oil spills, and unfortunately, evidence shows they’re entering the food chain via fish and other marine life. If unchecked, reports say the world’s oceans, by 2050, will contain more plastic than fish.

Why You Should Care About Garbage Patches

Samples by the Ocean Cleanup, spearheaded by the young Dutch engineer and CEO Boyan Slat, show plastics in the patch date as far back as 40 years. During an expedition in 2015 to gauge the size of the Great Pacific Garbage Patch, scientists measured the depth and size of the patch, and witnessed first hand plastics being eaten by marine life. If those fish are caught, they have a very real chance of being consumed by humans.

Technology and Innovation To the Rescue

The Ocean Cleanup has a different plan, however, and thanks to more than $30 million in crowdfunding and donations, they’ll use technology developed by Slat in 2013, when he was just 18, to deploy a series of arrays—a mobile drifting system made up of hard-walled, recyclable pipe with an attached screen designed to catch the plastics and trash. The arrays are not fixed to the sea floor, and they use the same currents that accumulate the trash in one place to corral it. Because the system moves with the currents and winds, it is extremely flexible to whatever the ocean can throw at it, making it more durable than vessels and nets. Vessels and nets would take thousands of years and billions of dollars to complete the cleanup.

Designed to catch debris as small as a centimeter before it can break into dangerous microplastics, and as large as discarded fishing nets tens of meters in size, Ocean Cleanup originally planned to deploy their arrays by 2020 with the promise of cleaning up 50% of the Great Pacific Garbage Patch in 10 years. On May 11, 2017, Slat announced that not only would Ocean Cleanup be able to deploy 2 years ahead of schedule in mid-2018, but that improvement to the design of the arrays meant they’d reach the 50% cleanup marker in only 5 years.

A test deployment is scheduled for late 2017, and when testing is complete, the full system will be deployed to begin its mission of cleaning up the Great Pacific Garbage Patch. Through reduction of plastics usage at the source and the innovation of Ocean Cleanup, instead of more trash than fish, we could see plastic-free oceans by 2050.

How Does Our Spending (and Investing) Reflect Our Values?

How we spend our money tells a lot about a person, to the point where corporations the world over employ fleets of people to study our spending habits. Complicated algorithms exist to predict the direction of the collective social focus through our purchase power, because that’s what it is: power. Consumers have the clout to drive social responsibility through the companies we choose to give our hard earned wages.

What product will become the next fair-trade coffee? The next hybrid or electric vehicle? Which industry is next to get an overhaul thanks to public demand for sustainably farmed, humanely raised, organically grown, responsibly manufactured products?

Is it the US egg industry, facing demand for cage-free eggs because Publix, McDonalds, and Wal-Mart—along with a host of other restaurants and grocers—have all pledged to eliminate battery farmed eggs from their shelves and menus within the next ten years? Maybe, despite what the egg industry lobbyists assert.

Our spending habits matter, driving change in the corporate world when we pledge to put our money where our beliefs are.

This is also true in our investment choices. In Audrey Choi’s Ted talk, she details how a Harvard Business School study showed that businesses focused on environmental and social issues alongside quarterly financial growth had greater returns on investment compared to businesses only focused on quarterly growth. Oxford University conducted their own research and found that the companies that cared about social and environmental responsibility had better operational efficiency, lower cost of capital, and better stock price performance.

“…the future is already here. Sustainable investment today is a $20 Trillion market, and it’s the fastest growing segment of the investment industry… It now represents 1 out of every 6 dollars under professional management in the United States.”

Sustainable business practices are becoming the norm as society demands more social responsibility to go with our consumerism. It’s no longer seen as tree-hugging, hippy, mumbo-jumbo to “vote with our dollars” for the business practices that closely mirror our values. Sure, there’s a premium to be paid if the label on a product contains the word “artisan,” but for a growing number of people, it’s worth it.

Audrey Choi says the financial impact of social responsibility has already made giants out of companies like Burt’s Bees and Ben and Jerry’s. As our conscientiousness grows, triple bottom line companies like these—who consider environmental and social issues alongside the financial impact of their business practices—are taking notice. Technology is not only making sustainable products possible, it’s making them affordable, giving the average person the leverage to spend dollars in line with values. Consumers, thanks to the Internet, are savvier than ever, and they don’t stop at researching products—they’re researching the companies behind the products. What doesn’t measure up gets bypassed.

“So why do we think that our choice of a $4 shade-grown fair trade cup of coffee in a reusable mug matters, but what we do with $4,000 in our investment account for our IRA doesn’t?”

The answer is, it does matter. Our choices have power beyond the supermarket, especially when the difference one person makes inspires others.


Knowing When (and How) to Change Financial Advisors

You set out on your financial journey with a specific vision in mind, and you thought you had a financial advisor who would be with you the whole way. Whether the market was bull or bear, there was one person (or team) you knew had your back.

Then it hits you—after many years, suddenly you and your advisor aren’t on the same page anymore. Is it you…or them?

Perhaps your investment priorities have changed. You are now interested in investing in one industry over another, or maybe you want a different kind of fund outside your advisor’s expertise.

Oftentimes, investment strategy changes with age: in your twenties, you wanted a portfolio that is more aggressive, but a decade on, you see the value in a slow and steady approach. Or perhaps it’s a “clean and clear” change you want by divesting and reinvesting in fossil-fuel-free options. It may even be more basic: you only want to invest in green initiatives or are interested in a more socially-equitable focus.

A good financial advisor will always meet with you discuss your questions and curiosity about a new financial planning or investment management strategy. He or she may have a strong reason for maintaining a specific strategy for you, but they should clearly be able to point to how and why it will benefit you, not them.

There may be more obvious warning signs that it’s time to leave.

Perhaps you’ve seen the signs—an inability to get your investment team members on the phone, or asking questions that your advisor doesn’t seem willing to answer. Maybe you have trouble getting anything in writing, from answers about fees and account management to updates on your portfolio and how it’s performing.

Whatever the reasons, a change is in order and you have no idea now how to break up with your financial advisor.

There are a few fundamental steps you can take to make sure the transition is as painless as possible, once you find a new advisor to suit your changing needs.

Read the Fine Print

Take a look at your management contract with the current advisor. There should be a clause included describing how to formally sever the relationship. There may be termination fees involved, so read carefully.  Ask if your investments are locked down. Some contracts can tie your assets up for a certain period of time.  Cashing these out early could incur penalties.

Transfer of History and Accounts

The good news, thanks to a 2011 ruling, is that your current advisor is required to transfer the historical records of all your securities to the new advisor.  Once you find a new advisor, the transfer itself can be performed with an authorization form. Most of the switch can be made with your assets transferring “in kind,” or without rolling them over. This is ideal, because the IRS has limits about the number of rollovers that can be performed in a year, and exceeding that limit can have tax consequences.

When providing a list of all accounts needing to be transferred, double check all your details are correct. Multiple account transfers can be slowed by rejections when numbers don’t correspond, or trust documents aren’t provided.

Follow Through

It doesn’t stop there, however. While you can leave it to your new advisor to trigger the transfer from their end, get proof of rescission your former advisor has severed his or her authority over your accounts If you’re against the idea of a face-to-face meeting with the former advisor, making a phone call to the old advisor during the transfer process can help facilitate matters. After all, trading should stop during the transition, and while no one likes having to discuss why things didn’t work out, it can help you both to understand where the holes appeared in the relationship so they can be avoided in the future.

There are all kinds of reasons people grow unhappy with their current financial advising team, whether it’s under performance, a change in attitudes, or a shift in focus. It doesn’t have to be a painful move from one advisor to another, and with a little up front knowledge, you can make the transition as smooth as possible. From there, it’s onward and upward.


After the Election: A Stronger Sense of Purpose

This article was originally drafted as a letter to our clients the day after the 2016 election.

It’s November 9th. The sun rose this morning. The birds were singing in the trees.

But, the paradigm has shifted.

Our team met this morning to discuss the results of the Presidential election and what it means for the markets, economy and ultimately, to our clients. While the pundits and pollsters were commenting and making predictions, we saw markets rise and fall with those comments and predictions. In the end, they were all wrong.

President-Elect Trump is an unknown when it comes to governing. Markets do not like uncertainty. There were moments last night when Dow futures were down over 700 points. This morning, however, the market opened up basically flat. That’s an incredible swing.

I believe that in times of uncertainty, we bring the best value to our clients. It’s easy to ride the wave when markets are rising, when it appears that every choice is a good choice. But, it’s the uncertain times that truly matter.

  • Our strategy of broad diversification and bias towards more conservative allocations helps.
  • Our analytical model which takes into account both market sentiment and volatility contributes as well.
  • Finally, our ability to make tactical investment decisions based on that analytical model closes the loop.

These factors bring together the quantitative and fundamental side of our value proposition.

In addition, our responsible investing philosophy charges us with finding companies and investment managers that are sustainable and doing good in the world. This qualitative side compliments the quantitative and fundamental analysis. And, I believe it makes for a better, more thoughtful and intentional, portfolio.

Now more than ever, consumers and investors need to vote with their dollars. The choices that we make matter. The legislation that will not happen in Washington must happen in corporate board rooms. I am more convinced than ever that responsible investing is the way to move forward.

Ultimately, I have faith in the ability of the markets to separate out the good from the bad – regardless of the political situation. We are grateful for the trust our clients have placed in us from the day we opened our doors. With a stronger sense of purpose to closely align financial planning and investment management with future-forward values, we will continue to work diligently to make sure client portfolios are the best they can be, no matter what circumstances arise.