Swell Investing, a California-based automated investing service backed by Pacific Life Insurance, sent an email to its customers informing them that they were "not able to achieve the scale needed to sustain operations in the current market." Beginning Wednesday, July 24, 2019, Swell will no longer be accepting new clients or deposits, and any accounts with a $0 or negative balance will be closed.
Swell was founded with a noble mission: to help its clients invest in firms that are working towards at least one of the United Nations' 17 goals for sustainability. They had curated lists of publicly-traded companies organized into themes, including Green Tech, Renewable Energy, Clean Water, and Disease Eradication.
The minimum to open an account was $50, and their management fee was 0.70% per year for assets under management. That's a higher fee than most robo-advisors or automated investing platforms charge, but the firm put a lot of work into selecting the stocks for their clients. Companies were screened to make sure that their businesses create a positive impact, and which environmental or social issues the firms were addressing. "Our portfolios are made up of the companies that we believe to be the cream of the crop," Swell says about how stocks are chosen.
Frankly, I'm sad to see them shut down, and fervently hope that their vetting procedure gets integrated into another automated investing firm's business. During the process of putting together our reviews of robo-advisors, I opened a small account and was pleased with the returns and how they were presented.
Clients have been instructed to withdraw their funds by August 30, 2019, and that their investments are safe as all cash and securities are held in a brokerage account in each client's name at Folio Investments, Inc. Another option is to transfer the securities held in the Swell account to another brokerage. This process must be initiated by August 15, 2019. Any account that still has a balance at the close of business on Friday, August 30, 2019, will be liquidated and closed, and the cash returned to the account holder.
If you're looking for impact-oriented portfolios that are built out of individual stocks, check out M1 Investing and Motif Investing. These firms don't have the vetting methodology in place that Swell used, but they allow fine-tuning of a portfolio built according to your specifications and a wide range of other possible investments.