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A Conscious Choice | A Tailored Approach | Sustainable Risk Management | Focusing on Companies of the Future | The Sustainable Investment Solutions™ Process | Who is First Affirmative | You and Your Network Advisor | Values and Conduct of Network Advisors

A Conscious Choice
There is nothing new in the idea of investors hoping to see their dollars grow—that’s the purpose of investing. There are plenty of financial service firms assisting investors with financial planning and portfolio management. Are you an investor who is looking for more?

At First Affirmative Financial Network, we believe you should want—and get—more. As a national provider of responsible investment services, we combine cutting edge financial management technologies with leading social and environmental investment strategies. Add to that our decades of portfolio management and consulting experience, along with personalized service offered through our network advisors, and you will find that we can help your dollars do more.

Investors are becoming increasingly aware of the influence their money has not only on their own futures but also on the fabric and consciousness of society. Corporations may have either a positive or negative impact on people, communities, and our natural environment. As an investor, you may be attracted to First Affirmative because we design investment portfolios that reflect client values and goals—portfolios that are invested in the best companies with the most positive impact on our world.

A Tailored Approach
At First Affirmative, we believe that in addition to the benefits of ownership, investors bear responsibility for the impact their money has in the world. So, we take a double bottom line approach to serving each investor client. Each portfolio is designed to earn competitive financial returns while reflecting client priorities for society at large. Portfolio design integrates your best interests with the greater good.

Client portfolios are custom tailored to your age, income, risk tolerance, financial goals, and social priorities. To the extent possible, your portfolio will reflect your deepest, most closely held values. Many clients, for example, choose to avoid companies that engage in objectionable practices, particularly those in environmentally destructive industries. Many choose not to profit from unhealthy consumer behaviors and to reward companies helping to improve quality of life for all. We can often incorporate community investments into your portfolio as desired.

There are no perfect companies. The mutual funds and separate account managers we use understand this and utilize both quantitative analysis of profit potential as well as qualitative analysis of environmental, social, and governance policies and impacts to identify appropriate investment opportunities. We offer comprehensive proxy voting services, and we can assist those who seek to be more actively involved in influencing company policies and impacts.

In today’s highly integrated, technologically sophisticated, and media-saturated world, we realize more than ever before that every purchase and investment decision has an impact on the quality of life our children and grandchildren will enjoy. Sustainable Investment Solutions™ is a way to direct the flow of investment capital with the dual objectives of making money and making a difference—helping to catalyze the shift to a more sustainable future.
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Sustainable Risk Management
Most investors share a common goal—to own an investment portfolio that offers the greatest likelihood of achieving or exceeding their investment objectives while controlling exposure to potential loss. The Sustainable Investment Solutions™ process creates portfolios designed for your specific financial goals and comfort level.

Investors with long time horizons are often better able to endure temporary fluctuations in the value of their investments, expecting that over the long run those investments will increase in value. Investors with relatively short time-horizons, particularly those who rely on their savings to pay their bills, tend to be more risk-averse.

Risk management is a process of minimizing the likelihood of failure. Risk tends to vary in direct proportion to return potential—the more risk an investor is willing take, the greater the potential re-turns and the greater the potential for short-term loss.

First Affirmative places a great deal of emphasis on asset allocation. Our evaluation of academic research and fiduciary standards of care suggests that asset allocation is the most reliable and manageable indicator of long-term performance and volatility. We also believe that a deep understanding of the people and processes within the mutual funds and investment management firms we use in client portfolios is critically important. As a result, our investment process places a heavy emphasis on finding the right mix of investment assets—one that provides a high probability of meeting each client’s needs.

First Affirmative generally recommends a non-heroic approach to risk management. Through diversification, we attempt to eliminate as much risk as possible for any given range of expected returns by combining different asset classes, investment styles, and managers. Diversification effectively smooths the ride by reducing overall portfolio volatility.
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Focusing on Companies of the Future
During the past thirty years, the responsible investment industry has led businesses across three developmental phases. Phase I called for a “Do No Harm” approach and was characterized by avoidance screening for harmful products like tobacco and alcohol.

Phase II might be characterized as “Doing Well by Doing Good.” During this phase, many companies reduced costs and enhanced profits through pollution prevention, waste minimization, energy efficiency, and other means—while garnering public goodwill and attracting socially conscious investment capital.

In Phase III, sustainable business initiatives are driving topline growth—encouraging innovation, increasing sales, and improving customer retention. Many companies are now demonstrating how products and services that help customers reduce emissions, save money, lower risks, and enjoy more healthful lives create real business opportunities.

First Affirmative believes that taking a sustainable and responsible approach to investing helps focus portfolio holdings on companies of the future—companies working in more sustainable industries, companies whose executive teams have demonstrated a commitment to accountability and ethical practices. We believe this is another way to manage and reduce long-term portfolio risk.

Past performance is never a guarantee of future results. All investment programs entail investment risk. The investment securities that may be held in a Sustainable Investment Solutions™ portfolio are subject to fluctuations in market value and may be worth more or less than the original investment when redeemed. Network advisors may offer securities through various broker-dealer firms and may charge commissions for certain transactions separate from First Affirmative that are not shared with First Affirmative. All fees and commissions charged to clients are clearly disclosed.

The Sustainable Investment Solutions™ Process
First Affirmative integrates environmental, governance, and social justice issues into the investment process. We accomplish this by recommending a portfolio that aligns as closely as possible with your values and goals, and by reporting and reviewing progress to ensure that your goals are being met over time. We offer a number of unique investment strategies, each designed to meet the needs of specific clients.

Designing an investment solution to meet your unique needs is a multi-stage process:

• Getting to Know You: We start with a Confidential Client Questionnaire that covers areas such as your current portfolio, comfort zone, risk tolerance, return goals, and values criteria—guidance on the personal, social, and ethical priorities that will affect investment decision-making. You meet with your network advisor to complete the questionnaire and share any other information pertinent to the portfolio design process.
• Portfolio Asset Allocation: First Affirmative uses the information you provide to develop a proposed investment strategy tailored to meet your unique needs. An Investment Policy Statement (IPS) is developed to govern management of the portfolio. Mutual funds, separate account managers, and other types of investments may be included in the portfolio, depending upon the situation.
• Implementation: After you have approved the asset allocation strategy, signed your IPS, and funded your account, your portfolio is allocated in accordance with your investment policy. All accounts are managed with discretion—in other words, First Affirmative has authority to manage the account according to the investment policy agreed upon up front. Our fees are transparent and fully disclosed. Compensation is based on assets under management, so our motivation to retain you as a client is aligned with your desire to receive excellent ongoing investment management services.
• Reporting and Monitoring: First Affirmative provides quarterly performance reports. Our portfolio management software and skilled staff monitor your accounts to ensure they are aligned with your goals. You can also expect your network advisor to monitor the activity in your account, to meet with you periodically to discuss your progress, and to identify any changes in your situation that might warrant changes in your portfolio.

Who is First Affirmative
First Affirmative Financial Network, LLC is an independent investment advisory firm registered with the Securities and Exchange Commission (SEC). We offer discretionary asset management services through a nationwide network of investment professionals who specialize in serving socially conscious individuals and mission-driven institutional investors. We actively seek to minimize portfolio dissonance and integrate a client’s mission and values into the investment process.

Through First Affirmative, personalized portfolio management is available to those who wish to profit from companies making positive contributions to society. Generally, our clients:

• Have confidence in the idea that reasonable profit margins are compatible with the health and well-being of all company stakeholders—customers, employees, communities, stockholders, and the natural environment;
• Support efforts to make companies more transparent and accountable to shareholders and society at large;
• Are concerned about fairness, human rights, the quality of our air and water, and the health of the global environment; and
• Desire to avoid investments that support violence and armed aggression, political unrest, the suppression of minorities, harmful products, or damage to local communities.

First Affirmative is a leading provider of investment management services to socially conscious investors. We serve on the board of directors of the Social Investment Forum, the industry trade association, and we produce the annual SRI in the Rockies Conference—the annual gathering of social investment industry practitioners in the United States.

First Affirmative works to integrate client values and investment decision-making with the common good. There is no longer any reason to separate good fortune from good will. Academic studies and real-world results (including ours) have effectively dispelled the myth that socially and environmentally responsible portfolios must automatically underperform their conventional counterparts. Indeed, market trends and broader economic forces suggest that investments in sustainable, progressive enterprises have the potential to perform extraordinarily well in the years to come.

Any investment portfolio that is restricted will perform differently than an unrestricted portfolio. Historically, well-diversified, professionally managed portfolios have at times outperformed their peer group average, and at other times underperformed.

As the future unfolds, it’s reasonable to expect that periods of both outperformance and underperformance will occur.

You and Your Network Advisor

Your network advisor is an important link to your investment portfolio and to First Affirmative. You can expect your advisor to monitor the management of your portfolio and track your progress toward your financial goals. Your advisor will help you coordinate all the parts of your financial picture and align each aspect of your investment strategy with your values and objectives. If your circumstances or goals change, your advisor will assist you in making appropriate adjustments.
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Values and Conduct of Network Advisors
We know that you place a great deal of confidence and trust in those who provide you with financial advice and manage your money. That’s why we have established a clear code of conduct to guide the behavior of our network advisors in their service to you and in their interactions with each other. Our services are based on the following fundamental beliefs:

• We believe that every person has a core set of values that governs his or her actions.
• We believe our shared values outnumber those about which we differ.
• We believe that, given a choice, most people would choose not to profit from behavior in others that they find unacceptable in themselves.
• We believe that fair-minded people respect and tolerate the values of others, even when different from their own.
• We believe that bringing personal values and financial decision-making into alignment is a powerful way to encourage behavior that enhances quality of life for all.

As a result, our network advisors embrace what we consider to be among the highest standards for investment professionals, including:

• Common Good: We actively reflect and promote the direct relationship between financial decision-making and the public good.
• Respect: We nurture and maintain a culture of respect in all we do—proactively promoting ethical behavior among our professional peers and within our wider communities.
• Fiduciary Duty: We accept and acknowledge our fiduciary duty. We place our clients’ interests above our own. We clearly explain our compensation structure and disclose potential conflicts of interest and other relevant information. We ensure that explanations are timely, accurate, complete, objective, and understood.
• Professional Education: We continuously work to enhance our professional knowledge and competence. We share information and ideas with colleagues, seek and offer honest criticism of technical work, acknowledge and correct errors, properly credit the contributions of others, and refer clients to appropriate professionals for issues beyond our knowledge and skills.

• We look forward to serving you!

  Privacy and Confidentiality: We respect the confidentiality of any information acquired in the course of our work. We do not disclose or share confidential information with others, except as authorized or when otherwise legally obligated to do so. We do not use confidential information for personal advantage.