We asked Swell product designer Cristina Stutz and product manager Arianna Savant about our latest iOS feature “One Click Divestment.” Wondering what it is, how it works, and why we built it? Hear from the team that designed this feature.
What is One-click divestment, and why did Swell choose to build it?
Cristina:
One-click divestment is a feature that allows investors to remove up to three individual companies from their Swell Mix. While this has always been an option for investors, we chose to build the ‘one-click” feature into the app to give our investors another, more personal layer of value alignment with their investments.
Swell offers a higher level of account personalization in comparison to other options. One-click divestment is one of the unique benefits Swell offers through their separately managed accounts (SMA). Having an SMA means you’re a direct shareholder of each company you invest in. As an owner you also have the right to proxy vote on decisions made by the company. Most of our competitors offer ETFs of funds which limit your individual participation. We don’t want people to make impulsive divestment moves but we do want them to understand how they cast a vote when they invest with Swell.
Why is divestment important to you personally?
Arianna:
At Swell, we want people to know what they own. Knowing what you own is the first step towards making more informed investment decisions. For each of the companies in our portfolios we create “company cards” — a bite sized summary of what it does, the UNSDGs it aligns with, and the impact initiatives it pursues.
It’s important to me that investors feel great about their Swell investment. For those few that hold strong personal opinions about certain companies, divesting empowers them with that option.
Why would a Swell investor want to divest?
Arianna:
Some investors will want to divest because of a strong personal opinion he/she might hold about a company or an individual within a company. Examples of what might motivate a user to divest are: a company’s handling of data, mis-alignment with management decisions or just having a bad experience with a specific company.
Investing in a company is synonymous with giving them a thumbs-up to keep doing what they’re doing. As a separately managed account owner you have certain rights not so unlike our right to vote. We like to think of investing as a YES vote. Similarly, if a company doesn't align with your values or violates your trust, your divestment is a NO vote. The tides are turning and consumers’ voices are heard beyond just social media to stock prices and proxy voting battles.
Offering a divestment option isn’t us stepping down from the investment approach we’ve crafted — in fact, we’re very proud of it and we’re behind each and every one of the companies in the portfolios we create. However, the world isn’t black and white, and no company is perfect. So while we have a darn strong case for why each company is included in our portfolios, we recognize that users might have their own set of principles that they want reflected in their portfolio. So this one-click divestment feature is meant to empower users to take that action, and even further align their portfolio with their values, if they so choose.
How does the feature work and when will it be available?
Arianna:
On our iOS app, a user can divest from up to three companies in each of their “Swell Mixes” by finding and tapping “Divest” on that company. They can do this during sign-up or after they invest.
Divested companies will be removed from all portfolios within your “Swell Mix”. A separate divestment list is maintained for each Swell account a user opens (Personal, IRA, etc.) in case you want to divest from certain accounts but not others.
Initially, users will only be able to divest themselves on the iOS app. If they do not have the app installed, users can contact our customer support team to have companies removed from their portfolios. The one-click divest feature launches in our web application later in 2019.
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