This post was originally produced for Forbes.
Fifty bucks and five minutes will make you an impact investor. I did it. So can you.
Swell Investing is a new impact investing platform created by social intrapreneur Dave Fanger, 40, of Pacific Life. The idea came, Fanger says, five years ago, thinking about how consumers were increasingly making buying decisions based on social impact and thought there ought to be a way for investors to do the same.
What he came up with incorporated the latest fintech tools for investing, commonly known as robo-advisors paired with impact data to make informed decisions about impact. The technology allows for accounts as small as $50 with annual fees of just 75 basis points or 37.5 cents on a $50 account.
The average account size is just $4,000, suggesting that most investors on the platform are small, some of who are starting with the minimum required investment.
Fanger says, “We define impact investing as identifying and investing in companies that are actively deriving revenue from the way that they are solving global and environmental challenges.”
That is distinct from traditional public securities investment strategies known as socially responsible investing, ESG or environmentally, socially and corporate governance investing strategies, that focus on a broader range of companies that are governed well and seek to mitigate their impact on the planet.
Swell Investing presenting puts its customers in their choice of six impact portfolios: green tech, renewable energy, clean water, zero waste, healthy living and disease eradication. The combined funds have about 300 companies, a small subset of the 4,000+ publicly traded companies in the U.S. markets.
The portfolios are intended to line up with one or more of the United Nations 17 Sustainable Development Goals focused on eradicating extreme poverty by 2030.
One key fact about impact investing is that it has traditionally been available only to wealthy investors. Swell Investing is part of a movement to make impact investing available to ordinary investors.
Mike Wynholds, CEO of Carbon Five, helped build out the product. “I think Swell Investing meets in the middle of two separate trends that are important people: low-cost investment advice (robo-advisors, etc) and being responsible stewards of our planet. Swell gives people a way to do something they have to do–saving money–while also doing something they want to do – saving the planet.”
Bryan Walker, partner and managing director at IDEO San Francisco, concurs. “Swell offers a solution for investors who want double impact: financial and social investing. Swell provides a new way for socially conscious consumers to invest without sacrificing the value of their investment.”
Fanger’s focus on impact investing grew out of his superpower: empathy. He says, “I had [type 1 diabetes] since age eight and just living through that and managing this disease has shown me that there’s more going on in life besides what you see on the surface with folks.”
Walker saw that in Fanger early on. “From our very first conversation, I was excited by his true personal passion around the idea.”
Still, Swell Investing is not a philanthropy or merely a corporate social responsibility initiative. Fanger is building this business to make money.
Fanger sees the companies the firm invests in growing and the interest in impact investing among ordinary investors along with it, allowing the firm to scale up assets under management.
IDEO’s Walker says human-centered design will contribute to the firm’s growth. “IDEO brought a human-centered design approach to Swell’s development, which means that design choices were informed by consumer feedback. The team today continues with this approach, engaging with investors to get their feedback on a weekly basis as Swell continues to grow and develop new features.”
Walker boasts that when IDEO’s engagement with Swell ended, he decided to personally invest in Swell because he believes in the company.
The technology is key. It allows for individual investors to hold in separate accounts tiny, fractional interests in companies like Tesla. Fanger also insists the company uses the latest in security to protect those assets.
The company is not yet profitable after launching late in the spring of 2017 and has twenty employees.
Carbon Five’s Wyhholds sees good things in Swell’s future.
“From what I can tell Swell is off to a great start. The key for both the viability of the business and the impact it will have on the world is scale, and while it’s still early on, Swell is growing faster than its competitors did at this stage.”
Never miss another interview! Join Devin here!
Devin is a journalist, author and corporate social responsibility speaker who calls himself a champion of social good. With a goal to help solve some of the world’s biggest problems by 2045, he focuses on telling the stories of those who are leading the way! Learn more at DevinThorpe.com!