Future of Investing

Personal Capital adds ‘socially responsible’ investments

  • Personal Capital launched a sustainable investment product to engage existing customers and attract new ones
  • Sustainable investments are a way the company can market the value of its hybrid advice model
close

Email a Friend

Personal Capital adds ‘socially responsible’ investments
Personal Capital rolled out a socially responsible investment (SRI) product this week in response to the growing market, especially among millennials, for those products. As the battle for customers intensifies among digital wealth advisers, startups and incumbent investment houses are launching products that speak to customers' values and preferences. Some specifically target  customer groups like women or halal investors, while others are adding specialized offerings to their line of products. "It's a better way to serve existing clients who have been demanding socially-responsible investment products, and also to attract new investors," Jay Shah, CEO of Personal Capital, said about the launch of its Socially Responsible Personal Strategy, which lets customers put their money into socially responsible investments without an extra fee within the same platform. By adding SRIs, Personal Capital can engage existing customers, and encourage them to grow their investment portfolios. With an average client portfolio size of $430,000, Shah said it's going after customers who have more to invest than those who might choose a lower-cost robo. Adding a socially responsible option may be a way to get a bigger piece of that pie. "It's a way to get more assets from existing customers because if they don't have a socially responsible option, they can put more money with competitors," said Kelley Byrnes, wealth management analyst at Celent. SRIs are also becoming expected offerings among both incumbents and startups, so the potential loss of prospective customers who want ESG offerings may also be a factor. "A lot of tech companies think... 'what are your prospects asking for, and what prospects do you lose [if you don't respond to demand],'" said robo-advice analyst and Dream Forward Financial co-founder Grant Easterbrook. With the ESG offering, Personal Capital may also be drawing attention to is its hybrid advice model. Though the company runs a free digital financial dashboard service with $500 billion tracked for 1.6 million registered users, it also offers a human advice service for a fixed fee. A socially responsible offering could be a way to entice users of the free service to switch over to the paid service. "The real business side for them is the human RIA firm," the human advice operation from Personal Capital, said Forrester senior analyst Davis Janowski. "This is more a millennial play; this is how they find investors for the human side." Personal Capital is the third-largest independent digital adviser, with $6.5 billion in assets under management with 76 percent growth year over year. It's the latest investment manager to get into socially responsible investments, joining Betterment, Wealthfront, Wealthsimple and incumbents like Morgan Stanley. By adding an SRI product, Personal Capital is enhancing options for existing customers, while using it to attract new ones who see it as as must-have.

0 comments on “Personal Capital adds ‘socially responsible’ investments”

Future of Investing

Philosophical Switch: Wealthfront introduces stock investing and plans to build investing habits for the long run

  • Stock trading by small investors is on the up and up.
  • Just in time Wealthfront has launched the option to invest into individual stocks exemplifying a philosophical switch in its robo-advisor business model.
Rabab Ahsan | March 23, 2023
Future of Investing

‘Would you rather talk about your weight or your money to your friends?’: Acorns’ Kennedy Reynolds

  • In 2021, 60% of Americans couldn't pass a basic financial literacy test.
  • Financial platforms consider it their responsibility to educate customers and offer the tools to help them make good life decisions.
Subboh Jaffery | March 07, 2022
Future of Investing, Member Exclusive

AT&T’s Cricket Wireless strikes partnership with Acorns to bring investing to its subscribers

  • Cricket Wireless and Acorns are teaming up to bring investing to more people.
  • With the Acorns app pre-installed on new handsets, Cricket customers also receive monetary incentives to use the investment app.
Zachary Miller | August 06, 2021
Future of Investing, Member Exclusive

‘Lots of music involved, too!’: A day in the life of Chidi Achara, CCO of Stash

  • Consumer interest in investing is taking hold. And for investing apps, that means sharpening their marketing game to reach their target audience.
  • Leading Stash’s marketing initiatives is Chidi Achara, chief creative officer at Stash. Here’s a day in his life.
Rivka Abramson | August 02, 2021
Future of Investing, Member Exclusive

Behind Betterment’s partnership with Zenefits to give SMBs access to retirement planning

  • Betterment’s technology led 401(k) provider teamed up with HR software company Zenefits.
  • Zenefits SMB customers will gain access to Betterment’s retirement planning and financial wellness offerings.
Rimal Farrukh | April 21, 2021
More Articles