Have you heard the latest in investing?
“Robo-advisors” are all the rage for investors in 2018 – 2019.
But which one is best for you?
There is Wealthsimple that allows you to invest as much, or as little, as you want.
There is M1 Finance with no management or trading fees. (Yup, FREE)
All of these options can be somewhat overwhelming.
But, if you are waiting for me to tell you which one to choose…
…it ain’t gonna happen!
That is for YOU to decide
Since no two robo-advisors are created equal, you need to educate yourself on at least a few options.
But instead of scouring the World Wide Web…
…you are in luck because class is in session!
We have spent hours analyzing and reviewing numerous robo-advisors for you.
But to save you the trouble of reading an article that does not suit you…
…please, take a moment to answer the questionnaire below:
- Do you want to make money while doing nothing?
- Do you care about our planet?
- Do you hate Ebola, Mad Cow Disease, and the Bird Flu?
- Do you enjoy some high-quality H2O, on occasion?
- Do you like to shame your morally-inferior friends and family?
All done? Good because that was a TEST cleverly disguised a questionnaire.
Give yourself 1-point for each question in which you answered “Yes.”
And here is what your score means:
- 3, 4, or 5: This may be the robo-advisor for you!
- 2 or below: You can stop reading now.
Today we are going to look at a robo-advisor called Swell Investing that specialized in impact investing.
But what is impact investing, anyway?
To understand the investment platform that we are covering, you need to understand impact investing.
We have heard it all before…
…you need to invest for a prosperous future.
But what about the future of our planet and fellow humans?! Impact investing addresses this concern.
Impact investing can also be called ‘sustainable investing’ or ‘socially-responsible investing.’
Call it what you want, but this investing gives you the power to create critical social changes.
Investors that seek to make such change do so by investing in companies that set a higher standard for environmental and social actions.
The best part is…
…you do not need to choose between money and creating change.
You can do both!
You can earn substantial returns on your investments and benefit people around the world.
That is precisely what Swell Investing can help you accomplish.
Swell Investing Overview
The company began with ONE simple question:
“How can we create a better investment option for people who care about where their money goes and what it supports?”
Does that sound Swell to you?
Swell Investing is an SEC-registered investment advisor created by Pacific Life.
These guys (and gals) are a small robo-advisor with just over $25 million under management.
So, if you are anything like me…
…you want to make a positive impact and make money.
The key word is “AND” in that sentence.
Because investing in something positive should not come at the expense of your wealth.
Swell creates themed portfolios of individual stocks.
The companies that make up each portfolio come from socially responsible industries.
If you are interested in investing in socially responsible securities, that is Swell’s specialty.
Currently, Swell provides its clients with six investment themes:
- Green Tech
- Renewable Energy
- Zero Waste
- Clean Water
- Healthy Living
- Disease Eradication
Swell can put your money to work in ways that can benefit millions of people.
But you will never fulfill your goals giving your life-savings to charity.
So, without further ado…
…does it make financial sense to invest with Swell?
That is what you are about to discover!
How Swell Works
If you have seen one robo-advisors, you have seen them all, right?
This section aims to focus on how Swell differentiates itself from other robo-advisors.
Swell allows its users to choose from pre-packaged portfolios that are managed by the company.
Users have the freedom to choose which portfolios to invest in and to decide the asset allocation in each.
Each portfolio contains between 40 and 70 individual stocks, and users can choose to swap-out up to three securities at their discretion.
Impact investing is nothing new…
…but the way Swell helps investors find the best stocks and invest at the lowest cost is new.
The platform locates innovative companies that fit the impact investing mold and uses them to fill each portfolio.
Sign-Up for Swell
The sign-up process for Swell is easy, straightforward, and shorter compared to other robo-advisors.
You must be a U.S. citizen or resident alien and at least 18 years of age.
Create your username by entering your e-mail and make a password.
Just enter your identifying information (e.g., name, date of birth, employment status) and answer a few questions.
These questions cover information like:
- Your current assets
- Your desired timeline
- Your risk tolerance
Fund Your Swell Account
Once the sign-up process is complete, you will link your checking or savings account (accepts most banks) to the brokerage account and start investing!
Swell will invest your funds as soon as they hit your account.
And, you can also set-up recurring deposits to automate the savings process.
The entire process from set-up to funding your account takes about 20 minutes to complete.
Once you have successfully signed-up, it is time to choose your portfolio!
Since Swell is going to be managing your money…
…wouldn’t you like to know how the company chooses its investments?
The company uses a rule-based approach to optimize impact and performance.
Here is the three-step process that goes into creating a Swell portfolio:
- Swell screens each company for their commitment to positive impact.
- Swell researches each company to see how they derive revenue.
- Swell analyzes each company’s financial health, stock valuation, and liquidity.
With this process, you are getting stocks that make an impact socially and financially.
You can invest in one of Swell’s socially responsible portfolios for as little as $50.
This low-investment threshold is impressive for SRI as it used to cost investors serious cash up-front just to get started.
There are six portfolios to choose from, each with a different mission.
Each Swell portfolio is composed of 40 to 60 stocks from companies that align with each category.
You can choose individual taxable accounts and Traditional, Roth, and SEP IRAs.
Summary: A portfolio of companies building products and services that reduce our pull on the energy infrastructure. Think of electric cars and LED lights.
Top 5 Holdings: Tesla Motors 4.63% | Analog Devices 4.23% | ABB LTD. 4.14% | Arista Networks 4.06% | Johnson Controls International 4.04%
Summary: A portfolio of companies conserving water, cleaning it up, and streamlining our systems. Think of water filters and pipe repairs.
Top 5 Holdings: Aqua America 4.15% | EcoLab 4.05% | Waters Corp 4.04% | Xylem 4.02% | Pentair PLC 4.0%
Summary: A portfolio of companies cleaning up our planet and meeting growing global demand. Think of recycling and repurposing.
Top 5 Holdings: Westerlock Co Com 4.06% | RPM 4.04% | Trimble 4.04% | Tetra Tech 4.03% | Ball Corporation 4.03%
Summary: A portfolio of companies that are harnessing natural resources to power our world. Think of turbines and solar panels.
Top 5 Holdings: PPL Corp 4.1% | Edison International 4.1% | National Grid Transco 4.05% | Digital Realty TR 4.01% | Eaton Corp 4.01%
Summary: A portfolio of companies working on pharmaceutical and biotech solutions to combat major health challenges. Think of Immunizations and research.
Top 5 Holdings: Incyte Corp 4.26% | Shire PLC 4.22% | Bristol-Myers Squibb 4.2% | Medtronic PLC 4.06% | Biogen 4.05%
Swell holds 0.25% of your portfolio in cash to cover advisory fees.
The cash held in your portfolio is FDIC insured and placed into an interest-bearing account.
Summary: A portfolio of companies that enable more of us to live longer, healthier lives through food, fitness, and technology. Think of nutritious foods and health centers.
Top 5 Holdings: Lululemon Athletica 4.08% | Align Technology 4.07% | Dexcom 4.03% | Unilever 4.03%| Abiomed 4.03%
Summary: A portfolio of companies that derive revenue from activities aligned with the 17 United Nations Sustainable Development goals. The most impactful companies in the market.
Top 5 Holdings: Tesla Motors 2.68% | Novartis A G ADR 2.32% | Apple 2.16% | Roche Holdings LTD ADR 2.1% | Nextera Energy 2.03%
Swell charges a 0.75% annual fee on all balances.
Given that Swell is a niche service higher fees should be expected compared to other robo-advisors.
So, if you invest $500, it will cost you $3.75 per year.
Or, as Swell would say, “The price of 3 fancy coffees.”
The company does not have:
- Trading fees
- Price Tiers
- Expense Ratios
Swell’s all-inclusive fee is refreshing because you know what you can expect to pay upfront.
Many robo-advisors advertise one fee while you are signing up…
…only to charge trading fees and expense ratios after you have invested your money with them!
With Swell, you do not need to worry about that happening.
Swell provides several valuable features that you can benefit you.
Here are a few key benefits that come along with this investment platform:
Tax Optimization. This feature sells your most substantial losses and gains last to reduce your taxable income.
Automatic Deposits. You can set-up recurring deposits to continually save and invest.
Customizable Portfolios. You can remove companies from your investment mix whether they are underperforming, do not align with your beliefs, or for any other reason.
We would like to see more features from Swell, such as educational materials, as the company continues to grow.
But for now, these features are useful and can help make the most out of your investments.
Swell uses e-mail as its primary method of communication with users.
There is no live customer service contact or direct links on the company’s website.
However, if Swell cannot solve your problem via e-mail, the company vows to be in touch to resolve your issue.
Additionally, there is an excellent FAQ Support Center site that can answer your questions on:
- Sign Up Process
- Funding My Account
- Account Types
- Deposits & Withdrawals
- Closing Your Account
- Taxes & Fees
We have found Swell customer service to be reliable but lacking compared to larger robo-advisors.
Who Swell Can Benefit
We always recommend that new investors test the waters with a robo-advisor.
Investing $50 with Swell is a great way to get started and test out the markets.
For more experienced investors, Swell is excellent for:
- Socially Responsible Investing. Make a difference in the world!
- Hands-Off Investing. Let your robo-advisor do the work!
- Young Generations. Because you are tech-savvy!
Swell’s target audience is millennials that want to make a difference in the world.
Small and large investments can be used to change how the world works.
Swell optimizes your portfolio for risk and expected returns.
Your portfolio is re-balanced quarterly to remove underperforming companies.
What We Love About Swell
Socially Responsible Investing. If you are seeking socially responsible investing – look no further.
Swell is a unique robo-advisor in the way that the company centers around SRI-themed portfolios.
Customizable Portfolios. Swell is also unique because the company gives investors the ability to choose individual securities.
Most robo-advisors invest primarily in exchange-traded funds (ETFs) which limits your ability to pick and choose the stocks that you want.
Swell investors can choose to swap out up to three shares in their portfolio.
Individual and Retirement Accounts. Swell is an option for investors with long- and short-term goals.
Whether you are saving for a home or retirement, there is an account for you.
All-Inclusive Fee. The simplicity of Swell’s pricing is what we like to see.
You do not need to worry about trading commissions or expense ratios.
To put it simply, what you see is what you get.
Low account balances. You only need $50 to start investing with Swell.
This minimum balance requirement is very low as far as SRI-themed portfolios go.
What We Don’t Love About Swell
High Fees. This “all-in” pricing model is simple but not the best deal for investors.
This fee structure can be particularly harmful to investors with large account balances.
Other robo-advisors typically charge fees between 0.25% and 0.50%.
Professional Guidance. Swell offers customer service by e-mail and phone during regular business hours.
Robo-advisors generally take a “hands-off” approach to investing, and some do so more than others.
Investors looking for personalized service should seek another robo-advisor (or forget robo-advisors altogether!).
Portfolio Management Tools. Swell lacks financial planning tools like calculators and other devices used to understand your finances and investments.
The company does offer weekly market analysis and a tool that investors can use to review U.N. Sustainable Development Goals.
The lack of tools is a minor setback given the ease of accessing them elsewhere on the web.
Ready to Start Investing?
Have you made up your mind, yet?
If you are prepared to invest for profit and impact…
…click here to head over to Swell Investing and open your account today!
Swell Investing Review Summary
Swell aims to help investors build a positive financial future and support peace and prosperity.
Hard to argue with that!
If you agree with the company’s mission, this could be the robo-advisor for you!
You can invest in everything from sustainable energy to healthy living.
But in all seriousness, it is more important to choose investments that instill confidence.
If social responsibility is not one of your goals, there are better robo-advisor options for you.
But, whether you are a beginner or seasoned investor, Swell is a good option for both.
The low-minimum investment makes this platform highly accessible to anyone.
Plus, the higher fees for this niche service will not majorly impact your investment performance.
You can use a financial advisor to set-up an impact investment portfolio…
…but Swell Investing makes everything so much easier!
If you are interested in making money and a difference, we highly recommend checking out our friends at Swell Investing.
Are you waiting for an invitation?