When deciding on an appropriate approach to investing, you may be considering socially responsible investing (SRI).
With its wide range of benefits, SRI can be a great investment strategy for building your wealth in a way that reflects your investment and personal values.
Read on to learn what an SRI approach is and how it can be achieved as part of your wealth management strategy.
What is socially responsible investing?
SRI involves investing in companies which are pioneering positive change in one, or several social issues, and which have high environmental, social and governance (ESG) ratings with respect to their peers.
The purpose of SRI is to invest in more ethical companies, while also benefitting from investments that are well-suited to grow your wealth.
When taking an SRI approach, investors will usually factor in considerations such as:
- What services does the company offer?
- What are the company’s core values?
- How well does the company manage its staff?
- How does the company handle waste/pollution?
- Has the company been involved in any legal action?
By taking into account these things, you can benefit from advocating social change, without compromising on potentially successful returns from your investments.
How can you take an SRI approach?
- Use a wealth management service
One of the first things you can do when taking an SRI approach is to seek the advice of a wealth management service. This will allow you to have the guidance of experts, who can help to direct your investment decisions while adhering to your ethical values.
For instance, Netwealth modern wealth management is a service that offers free tools and extensive advice for investors, as well as effective management of your portfolios – including the option of an SRI portfolio, which they offer to combine ethics, quality and efficiency.
Your chosen wealth manager can tailor their guidance to help you make the right investments, balancing both risk level and potential investment returns, all while reflecting your personal values.
- Align your investments with your goals
It’s also important to ensure your SRI portfolio is aligned with your financial goals, and a wealth manager can help you devise a financial plan to do just that.
They can then assist you in making the right investments in accordance with your goals, so your SRI approach is designed to suit your financial circumstances.
In addition, most modern wealth management services can also execute your investments and make the day-to-day financial decisions on your behalf.
- Continuously review and adjust your plan
Another key aspect of your SRI approach is to continuously review and adjust the structure of your investments to accommodate changes in your circumstances.
For instance, you may discuss with your wealth manager that you’re in a position where you’re happy to adjust your portfolio, so you’re making higher risk but higher potential return investments.
An SRI approach can be complex, but with this guide at your disposal, along with the advice of wealth management professionals, you should be able to maximise how you grow your wealth with effective and strategic investments.
Please note, the value of your investments can go down as well as up.
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