The Navigator's Duties Part 3: What to Demand from Your Advisor

If you've decided that your capital should do more than extract value or simply compound, you've already done the hard part. You know what you care about. You have a sense of the world you want to help build.

Now you need someone who can help you get there.

In the first two posts of this series, we argued that the wealth advisory industry has inverted the investor-advisor relationship. Advisors choose the destination; investors approve the route. We called it the captain-navigator problem, and we laid out what investors owe to the partnership if they want to reclaim the wheel.

This post is the other side. If you're an advisor who claims you can help someone use their capital for transformation rather than extraction, here's what that actually requires. And if you're an investor evaluating whether your advisor is up to the task, here's what to demand.

Understand Your Client’s Hurdle Rate

The traditional financial advisor is often an unwitting agent of the status quo, hiding behind the "market rate" dogma to justify a model of maximum extraction. We must reject the idea that success is defined by "beating the market" ; this is a benchmark built on the back of labor exploitation and environmental externalization. Instead, an advisor’s duty is to work off the client’s actual hurdle rate: the specific financial return needed for their security, while treating every dollar above that threshold as a tool for transformation. This is the shift from "Lens Investing," where we passively observe a broken system, to "Lever Investing," where we move capital into community-controlled financial institutions and employee ownership trusts, among other things. We don't need advisors who are experts in preserving wealth at any cost; we need partners who understand that capital is only productive when it is being used to rewire finance for shared prosperity and systemic equity.

Demonstrate Structural Fluency Beyond Stocks and Bonds

Most advisors were trained in a narrow toolkit—from school or their mentor: stocks, bonds, maybe some alternative investments. But the universe of structures available to investors who want more than financial returns is vast. Recoverable grants, where repayment is contingent on success. Revenue-based financing that ties payments to actual revenue rather than fixed interest schedules. Forgivable loans. Investments where you agree to take the first loss if things go wrong, so community lenders feel safe participating. Employee ownership transitions that build worker wealth instead of enriching private equity. Investments that never need to be sold. Impact-linked finance is also a growing field in which funders tie impact targets to outcome payments, the cost of debt and/or principal repayments. Impact investing out of a donor advised fund (if you aren't going to grant that pool, which would likely be preferable).

These aren't exotic instruments. They're proven structures that can deliver the outcomes you actually care about: stable community employers, worker ownership, local wealth-building, environmental restoration. If your advisor can only talk about spreading money across stocks and bonds, they may not have the vocabulary for where you're trying to go. That's not a character flaw. It's a skills gap. Skills gaps can be closed, but only if the advisor acknowledges them.

When we first started looking for advisors who could help us with impact, we ran into the same pitch over and over: maximize gains, minimize taxes, shelter wealth to create a legacy. That was the opposite of what we wanted. Through conversations and word of mouth, we finally began to meet advisors who could help us transform our portfolio. A resource like Values Advisor would have been helpful when we began our journey.

One note on how we work today: we don't have a single overall advisor. Instead, we partner with experts on particular solutions. For example, Clarion Call Capital manages our high-impact municipal bonds strategy. This model requires more coordination on our end, but it means each partner brings deep expertise in their area rather than surface-level knowledge across everything.

Break the Wall Between Philanthropy and Investing

If you want a complete financial solution, your advisor needs to work across the artificial divide between "giving" and "investing." The silo exists because of tax law, not because it makes strategic sense. A community development lender might need a grant for capacity-building and an investment for loan capital. An employee ownership transition might need a recoverable grant for technical assistance and flexible, long-term loans for the buyout itself. A community land trust might need donated land and investment in housing construction.

The best navigators start with a simple question: what does this organization need to succeed? Then they work backward to the right capital structure. Sometimes that's a grant. Sometimes it's debt. Sometimes it's equity. Often it's a blend that doesn't fit neatly into any conventional category. An advisor who can only think in one bucket will leave opportunities on the table and force organizations into structures that don't serve them. An advisor who can't move fluidly between these isn't navigating. They're driving in a lane.

Distinguish Real Impact from Marketing

The industry is flooded with impact claims that don't survive scrutiny. Every private equity fund now has an "impact arm." Every wealth manager has an ESG offering. The marketing is excellent. The substance is often thin. This is where a skilled advisor becomes essential. They can be uniquely positioned to sort through the branding and understand what is actually happening inside investments that claim impact.

Look at the contrast.

Apis & Heritage Capital Partners has transitioned $65 million worth of businesses into 100% employee ownership, with almost 400 worker-owners building real wealth. Their Employee-Led Buyout model converts companies from private ownership to employee-owned structures where the workers become the beneficiaries. The typical American household has $17,000 in savings. Workers approaching retirement in employee-owned companies hold a median of $165,000. That's what it looks like when the investment structure is designed for durability.

Now compare that to KKR's Ownership Works initiative, which we've written about before. KKR allocates a sliver of shared equity to workers, generates headlines about "employee empowerment," and extracts billions in the process. The press release says empowerment. The math says extraction. We're releasing a deeper analysis soon that shows the pattern is even worse than it first appeared.

Your advisor needs to be able to tell the difference. Most can't, because the industry doesn't train for it and, as we shared in part one, they are disincentivized to move assets out from under management. Advisors must develop the expertise to scrutinize impact claims with the same rigor they'd apply to a financial audit. And that scrutiny needs to extend beyond ownership to climate claims, racial equity claims, and community development claims. When a fund says "we invest in underserved communities," the navigator's job is to ask: on whose terms? Who benefits when the fund exits? What happens to the community ten years after the capital leaves?

When we first started aligning our portfolio to our values, we thought we could simply buy ETFs that marketed themselves as impact-focused. As we investigated the actual holdings, we learned that many of them were creating the very harms we were trying to avoid. That discovery led us to write our piece on ESG as impact placebo. The marketing said one thing. The holdings said another. Now we don't trust labels. We look at what's actually inside.

One fund that we invested in sold an impact investing community as one of the benefits of being a part of the fund. This obviously appealed to us because we were excited to find fellow travelers who were looking outside the box. They talked of learning opportunities, deal flow collaboration, and a values-aligned community. We eagerly attended our first meeting with a few impact opportunities that we were excited to share and an open mind to learn from others. Much to our surprise the facilitator talked mainly about tax avoidance (so that you could give a little bit of it away if you wanted to). When it came time for people to share investment opportunities the group looked at us like we had grown three heads when we shared something that was concessionary. If you have had even a short conversation with one of us you have probably heard that we also disdain the word concessionary but for different reasons than that group. They were concerned about the loss of financial gain while we were concerned that the word inferred that you were losing something rather than gaining a whole host of sustainable and robust impact. We attended a couple more of these meetings hoping to win over one or two of them to want more than to maximize their returns so that they could give a little away to their alma mater or their kid's school. Ultimately it wasn't a good fit.

Ensure Impact Survives the Exit

If you want durable impact, you need to understand how investments plan to end. Most fund structures eventually require a sale. And when that moment arrives, the private equity buyers circle. They don't care about your mission. They care about financial returns. This is where years of carefully built impact goes to die, and it happens quietly, after the press releases and the impact reports. The exit can undo everything.

A navigator worth the title plans for mission-preserving exits from day one. That means knowing about employee ownership conversions, community buyouts, investments that never need to be sold, and structures where the exit doesn't require selling to the highest bidder. It means building exit terms into the initial investment that protect the mission when the money eventually moves. Durability of impact is the expertise we expect here.

We recently led a Series A investment in a high-impact financial services company delivering real value into communities that traditional finance ignores. We wanted investors to benefit from the investment while also creating a path to get their money back that didn't require selling to the highest bidder. So we built terms into the deal that gave the company the right to buy back the equity at a preset multiple. We also structured it so that when investors sold or were bought out, the employee ownership group would have first rights to buy those shares. This created a fair, capped upside for investors and a pathway for employees to steadily own the business over time. The exit is baked into the structure from day one.

This is one of the least discussed and most consequential gaps in impact investing. An advisor who can't articulate their exit philosophy is one who will default to conventional exits when the time comes. And conventional exits almost always mean extraction.

Know Multiple Paths to Liquidity

In the last post, we argued that investors should question whether stocks belong in their portfolio at all. That argument puts a real demand on the navigator: demonstrate expertise in multiple ways to ensure you can access cash when you need it without defaulting to the stock market.

This is doable. Municipal bonds timed so some pay back each year. Private loans with defined terms. Notes from community lenders. Investments that never need to be sold. Direct investments with built-in options to get your money back. Advisors who say "you need stocks for liquidity" are often revealing the limits of their own experience, not an immutable law of finance. A skilled navigator should be able to construct a portfolio that meets your actual cash needs through multiple channels.

When we left public equities entirely, we needed a plan for accessing cash when we needed it. The first layer is simple: an emergency fund held in easily sellable treasury equivalents. The second is a budget for annual expenses matched against when we expect returns to come in. For anything unexpected and larger, we hold a portfolio of high-impact municipal bonds that are tradeable. We can access that cash in less than 24 hours. And we have a ladder of various impact debt instruments that return cash over time for planned expenses. It wasn't hard to build. It just looks different.

Partner to Identify and Eliminate Hidden Harms

Most impact reporting treats the harms investments create as something to measure. Tracking carbon emissions. Counting jobs. Reporting community investment dollars. Measuring is fine. But measurement alone changes nothing.

A real navigator goes further. They partner with you to understand what harms exist in your portfolio and then develop concrete steps to minimize or stop them. This means asking hard questions: whose wages are suppressed to generate these returns? Whose air is poisoned? Whose costs are shifted to taxpayers? Whose community is destabilized?

Then comes the work. What should you stop doing? What positions need to be exited? What fund managers need to be challenged or fired? And what should you start doing? What investments actively repair the damage that extractive capital creates? The goal isn't better accounting. It's recognizing that these hidden costs aren't bugs in the system. They're often the mechanism by which returns flow to investors. An advisor who can only measure harm but not help you stop creating it is only doing half the job.

Build Collective Power If You Hold Public Equities

If a client does hold public equities, individual proxy voting is close to useless. The math is brutal: retail shareholders own about 32% of beneficially held shares, voting participation crests 30%, and most of those votes support management. The advisor's job isn't to help you vote better. It's to help you vote together. Voting blocks, coordinated campaigns, coalitions that can actually force issues onto ballots - this is where it is possible to achieve impact.

This is a capability most advisors don't have and haven't thought about building, which tells you something about how seriously the industry takes shareholder activism versus how seriously it markets it.

If you go with this strategy it also requires you to have an advisor who doesn't just pay attention when there is a vote called for. It requires constant vigilance of the harms that public companies are doing and coordinating with others to enable you to have a voice to call them out on it. Due to the shareholder primacy in our public equity system, it is often a two steps forward, two steps back reality.

Show Your Work

Don’t just say "we believe in impact." Prove it. We want to see concrete evidence that an advisor has actually done this work before.

Have they helped a client spend down rather than accumulate? Have they built portfolios with multiple goals beyond financial return? Have they constructed a portfolio specifically targeting returns to cover a client's actual living costs rather than chasing arbitrary benchmarks? Do they use conventional benchmarks at all, or have they developed different ways to measure success?

What's their track record with capital that unlocks opportunities others won't fund? What investments have they walked away from, and why? When did they accept lower financial returns for greater impact, and what was the outcome? Ask them how they assess risk and why traditional measures of risk for marginalized communities are often inaccurate.

Advisors who've never used non-extractive strategies are untested. Track record matters not because past performance predicts future returns, but because these structures are complex enough that inexperience creates real risk.

Name What You Won't Do

Advisors with no disqualifications have no convictions. If they've helped private equity firms load companies with debt and strip their assets, that history is relevant. If they consider accepting lower financial returns to be inherently against fiduciary duty, they will be a perpetual barrier to the work you need done. The navigator should be able to articulate clearly: here is what I consider incompatible with this work.

Define Fiduciary Duty to Serve You, Not Constrain You

The concept of fiduciary duty has been weaponized by the financial advisory industry. Advisors invoke it to bully clients into conventional investments, claiming that anything other than maximum financial return would violate their legal obligations. This is a distortion.

Fiduciary duty means acting in the client's best interest. If your interest is building worker wealth, supporting community ownership, or using your money to unlock opportunities that wouldn't otherwise exist, then an advisor who refuses to help you do that is the one failing their duty. The standard isn't "maximize returns." The standard is "serve the client's actual goals."

We want an advisor who understands this. Who defines fiduciary duty as serving what you actually want, not as a shield to avoid doing the harder work. If an advisor tells you they "can't" help you accept lower financial returns or invest in non-traditional structures because of fiduciary duty, they're either confused about the law or using it as an excuse.

Colleagues have shared stories with us where their advisors told them that fiduciary duty legally prohibited them from doing what they wanted. So our friends dug in and asked some lawyers. The lawyers told them their advisor was completely wrong. They had every freedom to make the investments they wanted. Fiduciary duty was being used as a wall when it should have been a door.

Align Compensation with the Mission

If the navigator charges fees based on a percentage of your assets, they are structurally incentivized against your most impactful strategies. Every dollar put into a recoverable grant, a community lender, or a community ownership conversion is a dollar that stops generating advisory fees. The navigator's business model is hostile to the mission.

Impact-linked compensation, outcomes-based contracts, fee structures that reward putting money to work rather than holding it. These aren't radical ideas. They're just honest ones. An advisor who claims to support transformative investing but charges 1% of your assets annually is navigating with one hand tied behind their back.

Impact incentives can be between an asset holder and their manager or within organizations. You want to be clear on how your manager is compensated and by what they are incentivized.

We're asking a lot here. Structural fluency across a dozen capital types. The ability to see through marketing that the industry doesn't teach. Exit planning most fund structures don't support. Compensation models that may require starting from scratch. This is a high bar, and we haven't met many navigators who clear it entirely.

We're still figuring out what "good enough for now" looks like while building toward what "right" looks like long term. We've worked with advisors who were strong on some of these dimensions and weak on others, and we've had to decide what we can build together versus what's a dealbreaker.

What Comes Next

In the final post, we'll bring both sides together. The captain and the navigator, facing each other. A practical framework for how this relationship works when both parties bring their full weight, along with a worksheet you can bring to your next advisor meeting.