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4 Best Brokers for Socially Responsible Investing 2019

Anna-Louise JacksonApril 9, 2019

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As a consumer, you’ve always been able to make values-based spending decisions. Now you can extend that philosophy to your portfolio with a variety of options for socially responsible investing. (New to this concept? Read up on the basics of socially responsible investing, which is sometimes called impact investing or values-based investing.)

The growing popularity of SRI coincides with an explosion in the number of exchange-traded funds and mutual funds that make it relatively easy for investors to support their beliefs within a diversified portfolio. Such funds eliminate the legwork of identifying individual stocks that match specific criteria around social, environmental or corporate governance issues.

To meet growing demand among consumers for SRI options, online brokers and robo-advisors are expanding choices in this area. Here are NerdWallet’s picks for the best online brokers and robo-advisors for socially responsible investors.

Summary of Best Brokers for Socially Responsible Investing 2019

BrokerNerdWallet Rating CommissionsPromotionAccount MinimumLearn More
Charles Schwab

Charles Schwab

Best for Socially responsible investors who want a broker

$0

per trade

None

No promotion at this time

$0

Read review
Wealthsimple

Wealthsimple

Best for Socially responsible investors who want a robo-advisor

0.40% - 0.50%

management fee

$10,000

amount of assets managed for free for one year

$0

Read review
TD Ameritrade Essential Portfolios

TD Ameritrade Essential Portfolios

Best for Socially responsible investors who want a robo-advisor

0.30%

management fee

None

no promotion available at this time

$5,000

Read review
E*TRADE

E*TRADE

on E*TRADE's website

Best for Socially responsible investors who want a broker

$0

per trade

None

no promotion available at this time

$0

on E*TRADE's website

Our pick for

Socially responsible investors who want a broker

These brokers provide a broad range of ETF and mutual fund offerings for socially responsible investors, along with tools and features that will benefit all types of investors.

Charles Schwab

Charles Schwab

Fees

$0

per trade

Account Minimum

$0

Promotion

None

No promotion at this time


Promotion

None

No promotion at this time

Why we like it

Charles Schwab has earned its strong reputation: The broker offers high-quality customer service, two robust trading platforms, a wide selection of no-transaction-fee mutual funds and $0 trades of stocks, ETFs and options.

Pros

  • Two platforms with no minimum or fees.

  • Above-average mobile app.

  • Extensive research.

  • Large fund selection.

  • Commission-free stock, options and ETF trades.

Cons

  • Low default cash sweep rate.

Read Full Review

Our picks for

Socially responsible investors who want a robo-advisor

These online advisors provide portfolios for specific SRI strategies, offering diversification, but with lower associated costs and a hands-off approach.

Wealthsimple

Wealthsimple

Fees

0.40% - 0.50%

management fee

Account Minimum

$0

Promotion

$10,000

amount of assets managed for free for one year


Promotion

$10,000

amount of assets managed for free for one year

Why we like it

Wealthsimple’s $0 minimum balance requirement, hands-on human help and its no-fuss, streamlined design make it an attractive place for beginners to start their investing journey. But the company’s real standout feature among the robo-advisor competition is its lineup of socially responsible investment (SRI) portfolios, a refreshing addition for values-based investors. Another unusual offering that customers with taxable investment accounts will appreciate is free tax-loss harvesting, no minimum account balance required.

Pros

  • Access to human advisors.

  • Free portfolio analysis.

  • Socially responsible investment options.

  • No account minimum.

Cons

  • Higher account management fees.

  • Limited personal finance tools.

Read Full Review

TD Ameritrade Essential Portfolios

TD Ameritrade Essential Portfolios

Fees

0.30%

management fee

Account Minimum

$5,000

Promotion

None

no promotion available at this time


Promotion

None

no promotion available at this time

Why we like it

TD Ameritrade Essential Portfolios offers automated portfolio management that's in line with services of other robo-advisors. The standouts: A lengthy list of account types and a socially responsible portfolio choice.

Pros

  • Low investment expense ratios.

  • Competitive management fee.

  • Niche account types.

  • Morningstar-built portfolios.

Cons

  • Small portfolios.

  • High account minimum.

Read Full Review

Want to compare more options? Here are our other top picks:

How to pick a broker

Here’s a rule of thumb: Online brokers wanting to appeal to socially responsible investors will make sure SRI options are easy to find. Several of the major brokerages have a robust lineup of ETFs and mutual funds earmarked as SRI (or sometimes labeled “socially conscious”), along with tools to identify these investments. If you have a specific ETF or mutual fund in mind and are looking to narrow your options, check availability (and related fees) with the various brokers.

With a variety of options at your disposal, be sure to consider other factors specific to your goals — are you a beginner, a day trader, a retirement saver in need of an IRA rollover? Consult our comprehensive list of the best online brokers for general investors or use NerdWallet’s free brokerage comparison tool.

How to vet an SRI strategy

It’s also important to keep the following in mind as you decide which SRI investments will work for you:

  • Selection. A broker with a large array of options may be appealing if you seek variety, but if you have a specific fund or strategy in mind, a more limited selection may suffice.

  • Management costs. Not all ETFs and mutual funds are created the same, and associated management costs (expense ratios) can also vary widely when it comes to socially responsible options. Similarly, SRI portfolios at robo-advisors may carry higher fees than other offerings.

  • Diversification. As with any investing strategy, it’s important to remember the benefits of diversification (namely, reducing risk) and to include a range of assets that cut across various industries, company sizes and geographic areas when selecting investments that align with your beliefs.

Unsure how to approach SRI, or investing in general? See NerdWallet’s guide on how to invest money.

Last updated on April 9, 2019

Methodology

NerdWallet's ratings for brokers and robo-advisors are weighted averages of several categories, including investment selection, customer support, account fees, account minimum, trading costs and more. Our survey of brokers and robo-advisors includes the largest U.S. providers by assets under management, plus notable and/or emerging players in the industry. Factors we consider, depending on the category, include advisory fees, branch access, user-facing technology, customer service and mobile features. The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.

To recap our selections...

NerdWallet's Best Brokers for Socially Responsible Investing 2019