• LinkedIn
  • Facebook
(877) 573-4383
Keller & Associates CPAs, PLLC
  • About
    • History
    • Philosophy
    • Clients
    • Giving Back
    • Careers at Keller
  • Our Professionals
  • Areas of Expertise
    • Our Services
    • Affiliations
  • CAS
  • Resources
  • Connect With Us
  • Menu Menu

ESG Investments, Trick or Treat?

October 24, 2021

Two facts that cannot be denied are: (1) we need to be better stewards of our planet, and (2) all peoples deserve to be treated and represented equally. A niche market was developed in response to these critical needs – ESG investments.

“ESG” stands for Environment, Social, and Corporate Governance. ESG investing is the practice of considering ESG factors in financial analysis and investing in responsible companies. This is
similar to biblically responsible investing, which considers which companies align with one’s faith. ESG investing has seen substantial growth in recent years. These products come in the form of mutual funds, exchange-traded funds (ETFs), annuities, and individual stocks and bonds. It sounds like an easy way to do your part to make the world a better place, but before you treat your portfolio to an ESG allocation, let’s walk through some considerations to make sure you’re not getting tricked.

First and foremost, the financial services industry is just that – an industry. As with any industry, salespeople have incentives for promoting specific products. If your advisor is pitching ESG or biblically based investment products, the first question you should ask is, what do they stand to gain? Many ESG investments are also proprietary products, meaning the company that employs your advisor may be the same company that can earn commissions and fees from the sale of the product. It’s always important to ask about the existence of any conflicts of interest, commissions and fees, and to be skeptical of solutions offered by someone who doesn’t know your exact needs or goals.

Second, greenwashing exists in the financial industry. Just like food producers sell non-GMO orange juice at a premium (GMO oranges don’t even exist), investment product managers have been caught falsely promoting that their products are more socially responsible than others. Consider an ESG fund that invests only in companies which limit carbon emissions. It sounds socially responsible, so you invest. Unbeknownst to you, those “green” companies are selling their government-granted allotments of carbon dioxide output to other companies for a profit. Now, the commissions and fees attached to the fund have eaten away at your annual returns, the world is no greener for your sacrifices, and your good stewardship has been exploited. Regulatory agencies have prioritized this issue and are working to regulate ESG marketing to protect investors. However, the term “socially responsible” is subjective and means different things to different people. It’s been acknowledged that regulation might never come. So, what can you do?

Rest assured that honest, low-cost ESG products do exist if you know what you’re looking for and your advisor isn’t incentivized to promote specific products. As a CFP® Professional required to put my clients’ best interest ahead of my own, I would first recommend you identify your financial goals and have a solid financial plan developed. Then, I would select a nonbiased range of ESG investments if that was your desire, simulating varying exposures of each product in question to determine what your portfolio can tolerate without sacrificing long-term returns beyond your risk capacity. Only then would I advise you to treat your portfolio to an ESG allocation. If your advisor is skipping these key steps – you’re likely getting tricked.

Published in the Victoria Advocate

Hannah K. Gohmert is a CERTIFIED FINANCIAL PLANNER™ Professional and the Chief Compliance Officer for KMH Wealth Management, LLC.

 

https://kellercpas.com/wp-content/uploads/2021/10/blog-trickortreat.jpg 247 500 KMH Wealth http://kellercpas.com/wp-content/uploads/2022/04/keller-logo-290-1.png KMH Wealth2021-10-24 23:05:002021-11-06 17:39:48ESG Investments, Trick or Treat?

Don’t Fear the FAFSA

October 10, 2021

The start of October brings cooler temperatures, visits to the local pumpkin patch, scary movies, and all-you-can-eat candy on Halloween. October also marks a spooky but important date for those planning to attend college for the 2021-2022 school year: the opening of the Free Application for Federal Student Aid (FAFSA).

Do you have a college student or a high school senior in your household, or are you a college student yourself? If so, October 1st marked an important date for those who are planning to attend college or are currently enrolled in college. The FAFSA application for the 2021-2022 school year officially opened up to applicants at the start of October. Students should prepare or begin to prepare to file their FAFSA form as soon as possible. The FAFSA is an online application that allows students to request federal student aid, such as grants, loans, and work-study programs. Students should apply as early as possible in order to be considered for grants and loans, as some school and state funds are limited and often awarded on a first-come, first-served basis. Even if you don’t believe you will qualify for federal aid, you should still file a FAFSA application because you may be eligible for loans that are not based on income. Also, some schools require students to file a FAFSA application for merit aid.

It was not too long ago that I was a student myself and filed my FAFSA applications. It can be quite the blood-curdling task, but don’t let the process scare you! Start by gathering the required information and documents now, so that you are prepared. If you haven’t already, you will need to create a Federal Student Aid (FSA) account at fafsa.gov. If you are a dependent on another person’s tax return, your guardian will also be required to create an account as well. You will need your social security number and your 2019 tax records, such as your federal income tax return and W-2s. If you filed your 2019 federal income tax return, you may be eligible to import your tax information into your FAFSA application by utilizing the IRS Data Retrieval Tool, which proved to be the easiest option when I filed my applications. If applicable, you will also need bank statements and records of investments and untaxed income, such as child support or welfare benefits received. Parents of dependent students will also need to submit the information mentioned above.

As you can see, submitting the FAFSA application requires a great deal of information regarding your personal and family financials. This can be overwhelming, but if you begin to gather the necessary documents now, the task won’t be so haunting. In my experience, you can also reach out to your college with questions, they were always more than happy to help me with the FAFSA application process.

Remember: you can’t trick or treat ‘til your FAFSA application is complete! Don’t let October pass by without filing or starting the process of filing yours or your dependent student’s FAFSA application.

Published in the Victoria Advocate

Carlee H. Gibbs, CPA is a staff accountant for Keller & Associates CPAs, PLLC.

https://kellercpas.com/wp-content/uploads/2021/10/blog-fafsa.jpg 247 500 KMH Wealth http://kellercpas.com/wp-content/uploads/2022/04/keller-logo-290-1.png KMH Wealth2021-10-10 23:21:002021-11-06 17:31:55Don’t Fear the FAFSA

Latest Posts

  • Limiting the IRS’s Impact on your Business
  • Review your “Free Money” Match
  • Tax Credits Unique to 2021
  • Preparing for the Guaranteed
  • Navigating the Guaranteed
Connect With Us

Planning today will enable you to chart a course towards fulfilling your goals for tomorrow.

Start a Conversation

LinkedIn  Facebook

Contact

Keller & Associates CPAs, PLLC

mail@kellercpas.com

(361) 573-4383
(877) 573-4383

101 S Main Street, Suite 300
Victoria, TX 77901
Map and Directions

Monday – Thursday 8 AM – 5 PM
Friday 8 AM – Noon

Quick Links

Privacy Policy

KMH Wealth Management

© Copyright Keller & Associates CPAs, PLLC

Scroll to top