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The wildly popular Swell Investing company has recently announced they will be closing their virtual doors. If you’re a client of theirs, this news may not only have come as a shock but it also may have induced a slight panic. First of all, stay calm and let’s address what happens to your money after they shut down and any action items needed on your part.
Swell Investing quick facts
Swell Investing was one of the many investment companies to utilize robot-advisors. Swell Investing, however, had one major differentiator. Swell was solely focused on SRI or socially responsible investing. Customer portfolios were also only made up of stocks instead of the exchange-traded funds typically used by other robot-advisors. Swell investors were given seven socially responsible investing portfolios to choose from.
In July of 2019, Swell tweeted to announce that they will be closing at the end of August. As of July 24th, Swell Investing stopped accepting new investors and deposits. Any account with a zero or negative balance would also be closed. If this pertains to you or you currently have a balance with Swell, here’s everything you need to know about your money.
Where will my money go?
If you’re one of the socially conscious investors who has had an account with Swell Investing, don’t panic. You will see your money again. First, anyone with a Swell account will still be able to login to their account dashboard through August 30, 2019. If you do nothing from now until then, Swell will cancel your advisory agreement effective August 30th. Your portfolio will be taken over by your current custodian, Folio Investments. Folio will sell your positions and disburse the remaining balance of your account to you.
Your account balance with Swell will be returned to you in one of two ways. If you have an active bank account on file, Swell will ACH transfer your balance to your account. Swell may also disburse your account balance via check to the address on file if this is your preference. Swell will additionally be waiving their management fee for August to help with the transition. They will also be taking on any account transfer fees and closing fees that are normally charged by Folio.
Do I need to do anything?
From now until August 30th, you are still able to login to your Swell account. It’s a good idea to log in and double-check that you have the correct address on file if you’ll be receiving a paper check through the mail. If you’ll be receiving an ACH transfer to your bank account, log in and make sure you have your preferred bank account on file as well. It’s important that your information is up to date so you can receive your money.
Technically, if you know your account information is correct, no action is needed on your part. You’ll receive your account balance in your bank account or via check in the near future.
Transferring your account balance
If you wish to invest in a new platform with the balance of your Swell account, there is a step-by-step guide available on their website. You should note that the deadline for transferring was closed on August 15th, so they aren’t guaranteeing that anything you transfer after this date will process in time. Transfers are only initiated on the receiving broker’s side, so Swell will not be able to initiate any of these transfers on your behalf. You should also note that you can only transfer your balance between accounts of the same type. A Traditional IRA, for example, can only be transferred to another Traditional IRA. The same goes for a Roth IRA as well.
To initiate a transfer, be sure to have your Folio Investments account number and information handy. You don’t need any of your Swell credentials from here out. You’ll also need your personal information such as your birth date and social security number as well as the type of account your transferring. Check out their instructions for more information on how to initiate a transfer. If you don’t wish to do anything, check your bank account or your mailbox soon for your account balance with Swell.