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Asset Management

03:30 PM
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The Emergence of Virtual Financial Planners

If Finovate Fall 2014 is a guide, targeted financial planning tools are now popping up for every demographic -- from kids earning an allowance to seniors looking to monitor for fraud.

I'm having a midlife crisis. The nephews and nieces are starting their financial lives, and the parents, uncles, and aunts are beginning their retirements, with me sitting right between the two groups. Who do they call? The relative in finance. You all know what I'm talking about. They all have vastly different needs, and I'm grossly underqualified to support them. This is where financial technology is filling the gaps.

I look forward to pushing friends and family toward a number of companies featured at the Finovate Fall 2014 event, with the hope that the apps will take my place as the resident financial expert.

For the kids, FamDoo is an allowance rewards program. Parents can assign tasks to kids and reward points for each task. Children can complete the tasks and be rated and rewarded. As points are accumulated, children can then save, spend, or donate their points.

True Potential is an impulse savings program, which is perfect, given that "impulsive" seems to be an attribute worth exploiting in certain family members. True Potential takes a goals-based approach and says that, of the 32,000 current users, 40% of all transactions have been worth less than 10 pounds (Sterling). Yes, pounds. Unfortunately, the platform is geographically limited at this point.

For college, SAS Games created the TiViTz College $avings Game-a-thon. The program is linked to a college savings plan, and children set pledge goals for family members and friends. Goals are achieved by playing math-learning games. The demo illustrated the idea of children asking for pledges instead of presents, but I'm not sure whose children they were illustrating. They sure weren't mine.

iQuantifi is a financial goal management platform geared specifically to millennials. Targeting is obvious with goals such as "rent" and tools like a cash finder to figure out how to adjust cash shortfalls with financial decisions. This platform hits a sweet spot for the nephews and nieces, though the price point makes me a little uncomfortable at $89 per year. So this is a tool I'll be saving for those who have no impulse control and can't foresee the impact that buying decisions have on future goals.

Blooom is de-obfuscated 401(k) advice. Users log into their 401(k) provider through Blooom, and their data is extracted and analyzed. At that point, the portfolio is displayed and discussed in terms anyone can understand. Adjusting the allocation leveraging a user's options is simple. Also, unlike most other third-party platforms, blooom actually executes the trades on behalf of the client. It charges $10 a month to execute and monitor the service. I don't know if I would recommend the monitoring, but $10 once a year or so is a no-brainer gut check.

HedgeCoVest is not in our family economic viability food chain, but for many of you, the platform could be interesting. The platform takes a flat 2.5% (no 2/20 on top of that), and the custodian (right now Pershing and Interactive Brokers) charges trade commissions. Unlike traditional hedge funds, there are no holding periods, and you do not have to be a qualified investor to participate.

Lastly, EverSafe is a financial abuse monitoring tool geared specifically toward seniors. Every financial institution has fraud management capabilities today, but EverSafe behaves like an overlay watching for transactions that would appear suspicious for its target demographic. The system then alerts both the senior and the senior's trusted representatives of suspicious or abnormal activity. From my perspective, EverSafe wasn't the most impressive technical feat of Finovate, but it was probably the most thoughtful.

From a purely technical point of view, the barriers to entry on some of these ideas isn't particularly high, but it was refreshing to see how targeted some of the design was for particular users. For instance, I've had multiple 401(k) providers over the years, and none of them has been even remotely close to blooom in usability. In price? I'm not so sure the same vendors have that dialed in quite yet. That said, there is no shortage of flexibility in a startup.

It will be nice to have some support from virtual financial professionals as family and friends embark on different stages in their lives. Now if the wearables innovators could only invent electroshock to prevent impulse purchases (and sugar snack ingestion).

Adam Honoré is a CEO at MarketsTech, LLC. Prior to joining MarketsTech, Mr. Honoré was the managing director at NASDAQ OMX responsible for global business development and the ISV program for FinQloud, and research director of the institutional securities ... View Full Bio
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