"Whatever starts in the institutional world always comes down to the retail world," Crager says. "Where we’re seeing it today is in the upper-high-net-worth category. The wealthy want to make sure their assets are being managed in a conscious way and that can represent anything – it can be environmental, it can be a stance against companies based in China or companies that have invested in Darfur or are supporting arms in Darfur or it could be religious. It could be no sin stocks -- no alcohol, no tobacco."

Envestnet has partnered with KLD Research & Analytics, which rates companies by how well they do on various fronts such the environment. The Envestnet platform puts investor portfolios through KLD's screening tool and informs investors of the activities the companies are engaged in. The financial advisor can then modify the portfolio to better suit the investor’s interests. "The retirement segment especially has an interest in this and when presented with the options, they not only want returns and protection, but as long it’s not going to adversely affect portfolio performance, they want to make sure their dollars are invested in a way that doesn't conflict with their views."

There is a danger of promising an investor that his money will be invested in a socially responsible way and then finding out that KLD didn’t do its job carefully enough, Crager concedes. "You never know all that goes on in a company," he notes. "Take a company like GE: it’s a large provider to the military of products like fighter jet engines, on the other hand it's building clean energy technologies. So how do you classify GE?" Envestnet's solution is to offer different grades of filters, such as a minimal SRI filter that might include GE stock and a more stringent SRI+ filter that would most likely reject it. To create its analysis, KLD looks at annual reports, interviews with companies, news articles and other types of research.

Crager believes Generation Y will be even more interested in socially-aware investing. "That next generation of children in their mid-20s is incredibly socially conscious," he says. "You can’t present them with a traditional investment portfolio. They're concerned about the effect on the community or the environment, and that's an indication of where the market will ultimately head."