When it comes to investing, we tend to primarily think about our ROI – return on investment. But now that we’re surrounded by groups supporting social causes, it might be time to rethink your investment philosophy.
Yes, you might be able to earn more by investing in whatever is the best investment overall–but have you ever stopped to consider what kind of impact that company might be having on the environment?
For instance, big tobacco is a controversial one. Yes, you could very well get rich investing in tobacco companies, but how does that make you feel? For some, it’s no issue. For others, it is.
That’s why we’re outlining the best robo advisors that have a social component or focus their business on social impacts. This list will give you some ideas on how to put your money toward some type of greater cause. Let’s start with Swell.
According to Swell, their company began by asking how they can “create a better investment option for people who care about where their money goes and what it supports.” They specialize in finding companies that have both high potential and a high impact on the world. Swell then breaks up the stocks into six different thematic portfolios.
Swell does an in-depth analysis of each company they choose for their portfolio. They start by identifying big problems that are impacting our world. From there, they look for companies that work to solve those problems. In fact, the companies they include “derive revenue from environmental or social impact as part of their business.” Finally, they take it a step further by making sure each company is a smart financial investment.
Every company that Swell invests in has revenues in alignment with at least one of the 17 United Nations Sustainable Development Goals:
- No poverty
- Zero hunger
- Good health and well-being
- Quality education
- Gender Equality
- Clean water and sanitation
- Affordable and clean energy
- Decent work and economic growth
- Industry, innovation, and infrastructure
- Reduced inequalities
- Sustainable cities and communities
- Responsible consumption and production
- Climate action
- Life below water
- Life on land
- Peace, justice, and strong institutions
- Partnerships for goals
Swell goes beyond socially-responsible investing by encouraging transparency and disclosure, as well as picking the best companies based on their revenue alignment. They go beyond Environmental, Social, and Governance (ESG) investing by screening out destructive and exploitative industries, as well as addressing social and environmental issues.
Swell offers standard taxable brokerage accounts, Traditional IRAs, Roth IRAs, and SEP IRAs. Their pricing is a flat 0.75% annual fee and they don’t charge trading fees, have pricing tiers, or add in expense ratios.
If you’re looking for impact investing, Swell might cost a little more, but they’re one of the best.
Wealthsimple is quickly becoming one of the best robo advisors overall, and they’re at the top of our list for being Earth Day-friendly, too. With Wealthsimple, you can choose a Socially Responsible Investing portfolio and invest in line with your values. According to Wealthsimple, they make it so you can “invest in socially responsible initiatives across the globe, so you can be well-diversified while helping build the world you want.”
When you choose a SRI portfolio, your money is spread across the entire stock market in low-cost ETFs. These ETFs are screened meticulously by Wealthsimple based on their:
- Environmental impact
- Social impact
- Overall performance
The funds that are currently part of this portfolio focus on issues such as:
- Low carbon
- Gender diversity
- Local initiatives
- Social responsibility
- Affordable housing
Wealthsimple is a fiduciary, meaning they are obligated to give you financial advice that’s in your best interest – not theirs. Yes, they’re a robo advisor, but they also have highly-knowledgable experts available to help you if and when you need it.
Wealthsimple is a bit more on the expensive side, charging 0.50% annually for up to $100,000 in deposits. Over that, you drop to 0.40% and get some more perks. Wealthsimple is one of the best overall robos, so if you’re looking to start with something that has an impact on the environment, you can’t really go wrong with Wealthsimple.