Financial advisors can look at OpenInvest as another robo-advisor competitor to worry about or as a tool to enhance their relationship with clients interested in responsible investment. The San Francisco-based start-up hopes they consider it the latter.


Launched in September 2016, OpenInvest offers personalized values-based investment.  Rather than simply tucking away money in one of the many ethical mutual funds on the market, individual investors can take more hands-on control of their portfolio. When an investor signs up, the platform asks the typical questions about age, income and retirement goals, but it also asks what she cares about—from reducing fossil fuel emissions and deforestation to supporting LGBT and women’s rights in the workplace. Then, using 10 ethical filters and proprietary algorithms, it automatically creates a customized index portfolio that includes S&P 500 stocks favoring the investor’s preferences and excluding names that don’t.

The investor doesn’t make the overall stock or bond picks, but because she owns actual shares rather than a mutual fund position, she can pull in a name, say Tesla, or divest from a company she’s unhappy with, say Wells Fargo. For example, just days after President Trump signed the executive order permitting the completion of the Dakota Access Pipeline (DAPL), OpenInvest designed a #divestDAPL feature that allows its clients to dump the companies financing and building the pipeline with the click of a button.

“Maybe tomorrow you decide you don’t want private prisons or Volkswagen, you can swipe them out on your phone, and we can instantly break apart and reconstruct your portfolio to keep you tracking the market,” says Joshua Levin, the company’s chief strategy officer, who co-founded OpenInvest with Conor Murray and Phillip Wei, formerly part of the tech team behind the hedge fund Bridgewater Associates. “So we’re creating a new class of investors, which are essentially active-passive investors.”

Hoping to democratize ethical investing and lure the young investors just starting out, OpenInvest requires only a $3,000 minimum investment and charges only a 0.50% annual fee. Levin declined to give exact user and AUM numbers since the platform is still new. But he did say they’ve got thousands of people signed up and assets under management in the millions.

They’ve also received quite a bit of interest from financial advisors, he says.

As you’ve probably heard, millennials and women are leading the “mainstreaming” of values-based investing, which was once the realm of foundations, development groups, religious organizations and the very wealthy. Now, worldwide assets professionally managed under sustainable and responsible investment strategies have surpassed $23 trillion, according to the Global Sustainable Investment Alliance’s recently released biennial review. That’s 26% of all professionally managed assets globally.

In other words, it has become difficult for financial advisors to ignore the trend, and some argue that doing so could cost them business, especially as the “great wealth transfer” from baby boomers to their millennial children gets underway.

Levin says that because of demand from advisors, OpenInvest will launch an advisor portal in the coming months. And while he acknowledges that the digital natives set to inherit their parents’ wealth could use the platform to bypass their family advisor, it could also function as tool to strengthen the relationship by providing touch points for interacting with clients.

“The values conversation is something savvy advisors can use to their advantage,” Levin says. “They’ve been spending years attempting to talk to their clients about values in indirect ways, like asking about sports or warming up the heartstrings with conversations about kids. Why not actually talk about what people care about regarding their investments?”