A new John Hancock-backed wealth management platform wants to stand out in an increasingly crowded fintech field by helping millennials to invest with a conscience


Megan Schleck, COIN CEO

  • COIN, a new fintech launched by John Hancock, wants to help first-time investors get started by using their money to do good.
  • The platform, which is nearly identical to a fintech started two years ago by another insurer, asks investors what causes matter most to them, such as gender equality and clean water, and invests directly in companies that match those preferences.
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A new fintech platform wants to help first-time investors get comfortable with stock markets by putting their money behind companies with themes they believe in, like clean water and gender diversity.

Do-good investing, which includes investing with an eye toward environmental, social, and governance factors, has become more standard for institutional investors, such as pension funds, and even for the ultra-wealthy. It’s just starting to take off among individual investors, who haven’t had as many options as bigger investors. But just how much of a difference they can make, and if their dollars will start moving toward new ESG products, is still up for debate.

COIN, backed by John Hancock, is the latest fintech platform to tap into the individual investor market. Launched last month, it mirrors Swell, a fintech from Pacific Life Insurance started two years ago. Both platforms ask users to pick the causes most important to them, based on a set of development goals outlined by the UN. After that, they funnel investors’ money to fractional ownership of specific stocks, with advisors who ensure portfolios aren’t too tilted to certain areas. 

See more: A do-good investing firm founded by Warren Buffett’s grandson and a former Gates Foundation exec just raised its first funding round from the world’s richest families

“These products are 100% focused on a younger demographic, a demographic that probably doesn’t have a lot of money to invest, but ensuring they’re socially responsible is something they’re very interested in,” said Jen Butler, a senior analyst who leads research firm Corporate Insights’ digital advice team. 

Swell and COIN charge a 0.75% annual fee, less than the typical 1-2% fee charged by financial advisors, who often only work with wealthy clients. And both require only $50 to start investing. 

“If you don’t have access to an financial advisor to help you make those choices, the issue has been that the one-on-one financial advice is reserved for people with $1 million-plus in assets,” Megan Schleck, the CEO of COIN, told Business Insider in a recent interview. 

COIN is not for every first-time investor. Users need to have at least savings and retirement accounts elsewhere to get started, Schleck said. Swell already offers retirement options, which Schleck said could be “a natural next step” for COIN, along with new thematic investment causes, like animal rights. 

One critique of the burgeoning ESG movement is that investors can’t solve climate change or fix gender imbalances with $50, or even $50,000. 

“It’s fractional investing, so how much impact that has, I’m not entirely sure,” Butler said. “If you invest $50, it’s not enough to buy one share of Apple.”

Fran Seegull, the head of the US Impact Investing Alliance, said individual investors have more power than they think because of the trillions they control. If individuals embrace do-good investing, whether through fintechs like COIN or through the proliferation of mutual funds and exchange-traded-funds available via traditional managers and robo-advisors, the market could change drastically. 

“When you look at the rise of 401(k)s and the outsourcing of retirement plans, we think the retail investor is absolutely key to this movement,” she said. “We talk so much about high net worth investors, foundations, etc., but we believe this market will get to scale with those constituencies and with bottom-up demand from the retail investor … We see there’s a sea change coming in terms of demand for impact investing products.” 

‘The break in the link’

As more individuals start investing even small amounts, there’s one group holding back the development of the do-good investing market for the masses. Financial advisors, who collectively oversaw $82.5 trillion in assets last year, according to an annual study by two industry groups, aren’t yet generally on board with the strategy. 

Schleck said it’s too early to tell if COIN users are investing under financial advisors’ guidance; if they’re also using other tools, such as robo-advisors, in conjunction with the platform; or even what the first wave of investors looks like. An April regulatory filing for Swell offers some clues for the fintechs’ user base: after two years, the platform manages a total of $33 million across 14,000 accounts, with more than 600 of those clients fitting the high net worth category, though it’s unclear if the wealthy investors came in through a financial adviser.

Swell could not be reached for comment. 

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Asset managers have started offering more ESG-themed products, and surveys generally indicate that investors, particularly women and millennials, want those options, said Brendan Powers, an associate director in Cerulli Associates’ product development practice. He said there’s “a ton of buzz” around ESG products, but “actual investment hasn’t necessarily followed.” 

“It seems the break in the link is with advisers right now,” Powers said. “They haven’t necessarily taken all those resources available to them and connected them with perceived client demand … Part of the reason they’re not embracing this is demographics – they’re older and close to retirement. It’s hard to get people to change what they’ve been doing for so many years.”

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