November 2, 2015
I have been observing the two popular categories given below.
Personal Investing: Digital capabilities for creating an online investment portfolio based on a financial and risk profile.
Wealth Management: Digital capabilities similar to personal investing providing private banking and asset management functionality.
Here are some companies that are doing a splendid job in these categories:
1. Motif Investing
Company overview & product solutions: ▪ Thematic investing allowing personal investors to take ideas turning them into investments with motifs investing in index-based funds with transparent exposure in a low-cost customizable product as the next generation online broker ▪ Trading platform with speed in investing allowing to buy 30 securities in 1 single click ▪ Personal investors have option in investing via a catalog of 130,000 motifs (professional or community) or create one from scratch ▪ Creator Royalty Program paying personal investors a royalty if another member uses it ▪ Social tools to create Investment Circles including discussion boards ▪ Motif Investing allows personal investors to invest any dollar amount in a stock or ETF ▪ Plans to expand internationally ▪ Future product strategy includes wealth management capabilities
Direct partners: Pershing Securities LLC
Their revenue model is based on from commissions, margin interest and other fees.
Total funding & investors: ▪Funding received: $126.5 million ▪Investors: JPMorgan, Goldman Sachs, Foundational Capital, Balderton Capital, Ignition, Norwest Venture Partners, Wicklow Capital, Renren
Company overview & product solutions: ▪ A technology platform that provides personalized and interactive tools to allow individuals to model financial decisions based on 11 areas, including home purchase, retirements, student debt, etc. ▪ Provides a startup economics calculator to see how much it is to sell a startup to a larger company ▪ Added detailed housing data when evaluating mortgage data ▪ Detailed interactive maps in all sections ▪ Founded in 2012
Total funding & investors: ▪Funding received: $7.6 million ▪Investors: Javelin Venture Partners, North Bridge Venture Partners, Peterson Ventures, Y Combinator, Quotidian Ventures, SV Angel, Brendan Wallace, Denis Grosz
Company overview & product solutions: ▪ Named as the private banker to everyone; provides sophisticated wealth management to those not in the top 1% with no minimum account to open and one low yearly fee ▪ Wants to be the Google of investing, providing additional asset classes with a mission to become the most innovative financial service in the world ▪ Automated investing platform with sophisticated portfolio features such as downside protection ▪ Offers high-net-worth client rewards in their Alpha Club such as rooftop parties, private jets, etc. ▪ Partnered with CircleUp to launch The Hedgeable Circle to invest in private companies ▪ Investments include alternative asset classes, private companies, bitcoin, etc. ▪ Highly tailored portfolio customized to your portfolio and goals ▪ Seven-day white-glove services via chat, text, email, phone, etc. ▪ $5,000 minimum to open account ▪ Founded in 2009
Direct partners: ▪ FOLIOFIN ▪ Other registered investment advisors or firms
Their revenue model consists of commissions, margin interest, account management and other fees.
Total funding & investors: ▪Funding received: $1.85 million ▪Investors: Route 66 Ventures, SixThirty (FinTech accelerator), Pascal Bouvier
Company overview & product solutions: ▪ Wealthfront makes it easy for anyone to get access to world-class, long-term investment management without the high fees or steep account minimums ▪ Monitors and re-allocates 24/7 automatically, rebalancing with tax efficiency in mind ▪ Investment methodology established by world class investment experts ▪ Invests in ETFs that track indexes across major asset classes
Direct partners: APEX Clearing Corporation
The revenue model consists of yearly annual assets under management account size fees.
Total funding & investors: ▪Funding received: $129.5 million ▪Investors: DAG Ventures, Index Ventures, Greylock Partners, The Social+Capital Partnership, Spark Capital, Ribbit Capital, Dragoneer, Benchmark, and multiple individual Investors
Company overview & product solutions: ▪ It is the largest automated investing service that helps people manage and grow their wealth through smarter technology ▪ A personalized investment plan is developed creating a diversified portfolio of globally diversified low-cost ETFs ▪ Investor’s portfolios are automatically rebalanced regularly ▪ Offers customized financial advice and goals
Direct partners: Betterment Securities LLC
Total funding & investors: ▪Funding received: $105 million ▪Investors: Bessemer Venture Partners, Athens Group, Menlo Ventures
Company overview & product solutions: ▪ Builds an intelligent, tax-efficient, diversified portfolio including managing accounts at other institutions such as Charles Schwab ▪ Offers a concierge services to speak with a personal advisor online ▪ Investor’s portfolios are automatically rebalanced regularly including developing a customized portfolio ▪ Automatically rebalances and reinvests dividends including seeking ways to reduce taxes ▪Portfolio Tracker is a free service that allows investors to track all their investments in one place including receiving weekly summaries of portfolio performance along with alerts to sell or buy including how much excess cash could be reinvested ▪ Managed accounts where SigFig actively manages your investment portfolio ▪ Specialized portfolio for diversified income targeting a yield of 4% (requires $100K minimum and annual fees of .5%) ▪ Founded in 2011
Direct partners: ▪ TD Ameritrade ▪ Fidelity ▪ Charles Schwab
Revenue is not disclosed. Revenue model consists for yearly assets under management fees.
Total funding & investors: ▪Funding received: $30 million ▪Investors: Bessemer Venture Partners, Anthemis Group, Menlo Ventures, Union Square Ventures, Bain Capital
7. Personal Capital
Company overview & product solutions: ▪ Offers free online analytical tools to manage your entire financial life in one secure place in an award winning dashboard ▪ Fee Analyzer reviews all fees paid in any account—mutual fund, investing and retirement—for potential reductions ▪ Investment Check-Up Tool analyzes your portfolio to provide improvements to reach long-term goals ▪ Retirement Planner to build, manage and forecast your retirement goals ▪ Dashboard details Net Worth, Cash Flow, Account Balances, Portfolio Performance, Spending Analysis, Income Report among other areas ▪ Create a budget and monitor cash flow against actual spend ▪ Technology platform is powered by Yodlee for the dashboard ▪ Provides financial advisors to develop custom financial plans ▪ Private client member service with clients with over $1 million to invest receive direct access to a certified financial planner with private banking services provided by Bank of New York Mellon
Direct partners: Pershing Advisor Services
Revenue is not disclosed. The revenue model consists of yearly assets under management fees.
Total funding & investors: ▪Funding received: $102.3 million ▪Investors: Institutional Venture Partners, Venrock, Crosslink Capital, BBVA Ventures, USAA, Venrock, Jump Capital, BlackRock
Robinhood, a Silicon Valley upstart, is courting young investors with as little as a few dollars to invest. The year-old company based in Palo Alto, Calif., promises to let investors trade without a fee or commission. A dead-simple interface lets you buy and sell stocks with a minimum of taps and no fees. Elegant charts show you a stock’s performance over time; in a nice touch, the color notifications show when the markets are open. The app’s home screen shows you the performance of your entire portfolio. The company charges for the ability to buy stocks on margin, or credit, and also makes money by collecting interest on users’ cash balances. It also plans to offer premium advisory services.
Total Funding & Investors
▪Funding received: $66 million
▪Investors: New Enterprise Associates (NEA), Index Ventures, Ribbit Capital and Social Leverage
The company is looking to bring top-flight wealth management services to the middle class. Unlike the other services, which are targeting a different price-point and typically tech-savvy, wealthier user, the classic client for FutureAdvisor has roughly $100,000 to invest and multiple accounts with different institutions. In some ways, FutureAdvisor's service is similar to other offerings on the market, in that it uses algorithms to optimize the portfolio for a potential customer. It offers free services around portfolio optimization and the aggregation of investment data into a single source. Should a customer want FutureAdvisor to actually execute an investment strategy, the company can do that—and indeed expect that service to provide a good chunk of its services.
On August 26, 2015, FutureAdvisor signed a definitive agreement to be acquired by BlackRock, a global leader in investment and risk management.
In company own words: MarketRiders is web-based investment management software that lets you build and manage a globally diversified low-cost retirement portfolio using methods developed by Nobel laureates. Reduce your investment fees, get Wall Street out of your pocket and retire with more. Most importantly, we help you stay in control of your investments.