Dealflow | May 11, 2020

Responsible robo-advisor Motif shuts down, with Folio and Charles Schawb divvying up the business

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, May 11 – Motif Investing was early to offer impact investing solutions for everyday investors, allowing individuals with as little as $300 to invest to build stock portfolios around social and environmental themes, and soon offered its robo-investing platform to financial advisors.

The company is shutting down after 10 years in business and transferring its retail accounts to Folio Investments, which will no longer actively manage Motif’s customer accounts. Motif’s technology and team will be acquired by Charles Schwab, helping the brokerage compete with the likes of Fidelity, which recently invested in impact investing platform Ethic.

Promising start, tough market

Motif reportedly managed about $850 million in assets. It had raised more than $125 million in venture capital, securing backing from Ignition Partners, JPMorgan Chase, Goldman Sachs’ growth-stage venture fund GS Growth, Norwest Venture Partners and others. Former SEC Chairman Arthur Levitt and Ellevest’s Sallie Krawcheck sat on the board. Just last year, Motif partnered with Goldman on customized exchange-traded funds.

But while everyday investors, underserved by the impact investing sector, seemed like a promising market demographic for impact-focused robo-advisors, Motif and its peers struggled to attract customers. Last year, Swell shuttered and OpenInvest pivoted its strategy to focus on financial advisors rather than retail customers (see, Retail platforms for sustainable investing struggle to differentiate themselves – and to attract customers).