What: Swell Investing
If you’ve read some of the latest posts, I’ve started branching out into other areas of sustainability. Namely sustainable investing. Today’s product review is on Swell Investing.
I’ve been struggling lately to marry my two loves, sustainability/eco-friendly living and personal finance. In the past few years, I’ve really delved into optimizing my lifestyle to be kinder to the wallet and the planet. I’ve seen first hand, how living a life with less waste in mind results in more money saved. Being a conscious consumer is powerful. By knowing your needs vs. your wants, you are longer privy to the pulls of marketing and impulse buys and thus can save more money in the long-run. The challenge is what to do with this money. The answer is investing.
A little side note on investing that it is the most powerful thing you can do with your money because it basically works for you. Investing is also just not limited to the stock market. You can read this post to read other investing alternatives.
I found Swell because I was looking to invest in companies that were doing good in the world. Companies that were tackling solutions to reduce waste, provide clean water, eradicate disease and so on. I was reluctant to move some of my money to a smaller firm like Swell, as most of my investments are with Fidelity and Vanguard. This question was also on my mind: Does investing in good really return a profit?
This reviews goes through what Swell is, how much I invested, how the platform looks. In the end, it’s up to you whether you want to invest via Swell. I would highly encourage you to take a look at the companies they invest in so that you can do further research and to see if these are inline with your values.
This post contains affiliate links. See Disclosures for details. This product has been independently reviewed. No compensation has been received from the maker for this product.
“Swell is an impact investing platform that helps you invest in high-growth companies solving global challenges.”
Swell allows you to invest in their 7 portfolios. Each portfolio is based on a high-growth industry that is solving problems in the following areas: Green Tech, Disease Eradication, Zero Waste, Renewable Energy, Clean Water and Healthy Living.
The last portfolio is what they call the Impact 400 which invests in companies across industries that have high ratings for Environmental, Social and Governance, with diversity and inclusion practices.
Swell is a subsidiary of Pacific Life, an insurance company with 150 years of experiences in insurance, financial services and other investment related businesses.
Swell received an initial funding from Pacific Life for Swell’s Porflios
Important to note is that Swell is the financial adviser meaning they provide advice on what to invest in, but your money is being managed by Folio Client, who handle the buy/sell of securities. Folio Client is registered with FINRA.
Investment carries risk. This post is not a recommendation to buy stocks. This post is for informational purposes.
Account Opening Process
As with any account opening process via a financial institution, personal information is required that includes your Social Security number.
You have the option with Swell to a open a Flexible Brokerage, a Traditional IRA, a ROTH IRA or a Traditional SEP IRA.
Minimum initial funding is $50
I chose to open a Flexible Brokerage Account for this review because I already have a ROTH IRA in another institution.
As mentioned above, Swell has 7 portfolios that you can invest in. You decide how you allocate your mix, meaning how much of your investment goes into which portfolio. I selected 4 portfolios which means my money was divided evenly across the 4 at a weight of 25%.
Annual fee to use Swell is .75% which means if you invest $50, it costs you $.37 a year or if you invest $500, it costs you $3.75 a year. Since they invest in individual stocks, there’s no expense ratio fees. There is also no trading fees or price tiers.
How to Open
Open online at Swell Investing and fund your account by linking a checking account.
Everything is electronic so you will sign the account creation forms online, receive account statements and receive proxy voting documents online as well which is good since it reduces paper.
Proxy and Voting
You as a shareholder have rights and since you own these stocks out right, you can vote in certain corporate activities. This is important to note as significant changes can be made through shareholders voting. You can check out As You Sow, a shareholder advocacy group to see what Resolutions are pending and how you can vote if you own the company stock. The Proxy Voting is a little clunky because it is held at the custodial account so you have to log in to Folio to do so.
Swell Platform Screenshots
I only initially invested $50 so that I could browse around the platform, see how things were laid out, how easy it was to use, how well it would. I selected 4 portfolios which means my money was divided evenly across the 4 at a weight of 25%: Healthy Living, Clean Water, Zero Waste and Green Tech.
Swell is transparent about what their portfolios invest in without needing an account so it’s a good idea to look at what companies make up Healthy Living. Healthy Living includes fitness apparel (i.e. Lululemon, Foot Locker), food (i.e. Danone, Sprouts), medical tech (i.e. Quest Diagnostics), health CPG (i.e. Unilever), etc. If you dig further, some of the companies may not be inline what your core values so they do allow you to remove 3 companies from the mix that you are absolutely oppose to.
There’s a tricky thing with this because nothing is going to be perfect. You can vest in Uniliver which unfortunately is a big contributor to single-use plastic, but they do provide lots of health products. The portfolios do not invest in Amazon because of the packaging issue, but do invest in Apple which has gotten flack of working conditions and planned obsolescence. With the portfolios is also the opportunity to invest in smaller companies that are not part of the S&P 500 that are still doing good in the world, that are public and that are making strides to make a better world.
Could you create a similar mix with your own personal portfolio? Yes. Will it take time? Yes. Will it be worth it to do? Probably not. I think Swell is a good option for those that want to at lease have a conscious say in what they are investing in to supplement and diversity their current investments.
The Swell user interface is straightforward, simple and easy to use, but you will have to toggle into Folio to take any corporate actions to that’s kind of a pain since you need to keep an eye out on any shareholder actions that you want to participate in.
Since my focus is on sustainability and this company is focused on sustainable investing, I like where they are going and I like the opportunity to be more socially conscious when investing. If I did not have the sustainability hat on, it lacks some features and you can read a review from Investor Junkie on that.
If you are supplementing or starting out, I think this is a good choice, but as your investment gets sophisticated and your needs change, consider revisiting if Swell is good for your long-term needs.
In the end, I agree with this statement from Investor Junkie:
“Swell is perhaps best used as the socially responsible allocation of a well-balanced portfolio. Unlike other robo advisors, Swell doesn’t create a diversified portfolio that invests in different market sectors or different asset classes, like bonds and real estate. It’s strictly socially responsible investing.” - Investor Junkie
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