Benzinga Fintech Focus

How Did A Startup Get Kevin Durant and Jay-Z Excited About Life Insurance? 

The Benzinga Fintech Focus Podcast will take a brief detour this week into the world of term life insurance. 

This week’s episode features an interview with Peter Colis, founder and CEO of Ethos, a startup looking to change the way consumers buy term life insurance policies. Ethos has raised over $40 million in venture capital this year from a combination of veteran Silicon Valley investors and celebrities like NBA champion Kevin Durant and Jay-Z. 

"Almost all insurance agents in America are individually commission based. Meaning, they profit when they sell you a policy, and the larger the policy they sell, the more profit they receive. And this is what we've always found is a bad misalignment center. And so none of our individual agents are commissioned and are compensated in any way to sell a life insurance policy."

"As far as these big brand celebrities and influencers who we were able to get to join, I think there was something common in that they all understood the issue we were trying to solve, which is that every year less people in America buy life insurance. Which is a problem because it's intrinsically good. Less and less families are getting coverage. So 20 years ago roughly 77% of families who could afford and should have life insurance had it. Today that's down to 60%."

And so when Lingke, my co-founder and current partner, was 20 years old he was sold a permanent life insurance policy by an alumni, this college agent. He aggressively convinced him to purchase a policy that he had no legitimate need for life insurance. Rarely does a 20 year old without a family have a need for life insurance. Especially permanent life insurance. He was in the process of lapsing this policy when we were in business school together. And we did a lot of research and figured out that his predicament was not unique. When you lapse a policy you lose a lot of what you paid into it."

Ethos: https://www.getethos.com/

For more information on life insurance click here 

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**How Do You Build An Investing App That Has More Users Than E*Trade? Ask Acorns**

Benzinga is rolling out the Fintech Focus podcast, a series of interviews with leaders in the fintech space.

Our fifth episode features Manning Field, Chief Operating Officer of fintech startup Acorns. Acorns is an investing app with a core service that lets users invest small amounts into a portfolio.

The app has since expanded to offer retirement saving and a suite of financial education products.

**Key quotes:**

“What we really do is look after the financial best interests of people who make under 100,000 dollars a year. The core idea that the company was founded upon was the fact that young people weren't saving and investing and didn't also have the confidence to save and invest because they were financially illiterate. What we've tried to do at Acorns, is to give access to that kind of population through technology, through design and through education and get them started, whereas, in the past they wouldn't necessarily start till much later in their life. Then in some cases, when you think about building long term wealth, those ended up being kind of fairly significant mistakes for people when they actually finally figure out they want to start investing. “

“We are a mission-led company, and that mission is really to look after the financial best interest of the up and coming, which is really kind of the handle we use to describe our target customer. And then we believe that it's starting with the empowering step, that first step of micro-investing. For us, this is the rallying cry for all of our teams. It's how we evaluate performance. It's how we recruit. And so, that's what brings everyone together. Often, in companies what brings people together is the stock price or valuation or some of these other things that are a little bit more rational, but don't really speak to mission purpose. And I think at any company, you always want to have a “why” and oftentimes that actually doesn't exist. And so, or you have to fabricate it. And I think the way in which the mission has kind of been embedded into our culture, like, we have a “why” and I think that's the way, that's how we will continue to benefit from that over the long-term because we're not going to veer from it. “

“Though we are a fintech company, we don't really have a strong bias towards fin or tech. We're much more of a brand company that uses fin and tech and so we think that that sets us apart and you'll continue to see us be set apart in that way.”

**A Dive Into The Startup Keeping Financial Advisors Accountable**

Benzinga is rolling out the Fintech Focus podcast, a series of interviews with leaders in the fintech space.

Our fifth episode features Aaron Klein, founder and CEO of Riskalyze, the startup disrupting the way financial advisors relate to their clients.

**Key quotes:**

“When my co-founders and I decided to start the company it was around this realization that investing felt very broken for the average individual, that individual investors really struggle to understand how to think about risk, and their financial advisors were frankly equipped with really, really bad tools, and really bad—almost nonexistent—technology to help them figure that out, and to help them understand it and communicate it well with their clients.”

“You know, basically the 2 different approaches that financial advisors used is they either used old wives tales. A really popular one was investor agent bonds, right? So, if you're 20 years old you should have 20% in bonds, 80% in equities, and if you're 80 years old you should have 80% in bonds, 20% in equities. And the reality is is that people are individuals and they have different levels of tolerance for risk and you've got to take that into effect and not just stereotype people based on age. And then you're right, they also did it a lot based on feel, and I would put it this way, the industry used a lot of qualitative language, and you still see it out there from advisors who aren't using Riskalyze yet. They'll sit down with a client and they'll say, you know, after talking with them they'll say, ‘Well, you feel like a moderate investor to me.’ And the client sort of nods and says, ‘Okay, yeah. That sounds good. I feel moderate today.’ And they'd say, ‘Great. We're going to put you in the vanguard moderate portfolio.’  Well, we have no idea if the 3 people at this table, the advisor, vanguard, and the client mean the same thing by the word moderate right? So, it's as if you're building a house and instead of using feet and inches your contractor says, ‘Okay, so we're going to do a moderately conservative hallway leading to the moderately aggressive bedroom.’ And something tells me that they're not going to have the right amount of materials there at the job to get the job done. The house is not going to come together.”

“You know, we kind of invented this space 7 years ago, and so today, if you look at the advisors who are actually using some kind of risk alignment tool we've got, you know, we've got somewhere around 80% market share. So, we're pretty dominant from that perspective, but when you step back and you look at the fact that only a small percentage of the financial advisors in the United States and in the world are using quantified risk alignment to serve their clients, all of a sudden we've got like 4 or 5% market share. So, we look out there and go, you know, we feel like we're just getting started, just scratching the surface both on the advisors that we can serve and the innovation that we can deliver for them.”

Andrew Jamison is the CEO of Extend, a platform backed by Point72, Plug and Play and American Express that enables business owners to digitally share their credit card with employees without exposing sensitive information. At AMEX, Andrew managed all B2B payments solutions, including virtual card platforms and products, before he left to start Extend, which Point72 Steve Cohen backed. Extend is slated to be the “PayPal of credit cards."

**Links:**

Andrew: [https://www.linkedin.com/in/andrew-jamison/](https://www.linkedin.com/in/andrew-jamison/)

Extend: [www.paywithextend.com](www.paywithextend.com)

Benzinga Fintech Summit: [https://benzingafintechsummit.com/](https://benzingafintechsummit.com/)

Cory is the Chief Market Strategist of Ripple. In his current role, Cory is focused on managing the company’s growth and telling Ripple’s story to regulators, Wall Street and global financial markets. Prior to Ripple, Cory worked as a hedge fund portfolio manager at Kingsford Capital Management and journalist at Bloomberg and CNBC covering high-growth technology companies. Earlier in his career, Cory ushered in many startups, including theStreet.com, the Industry Standard, SLAM and Vibe magazines.

**Links:**

Cory: [https://www.linkedin.com/in/cory-j-600718/](https://www.linkedin.com/in/cory-j-600718/)

Ripple: [https://ripple.com/](https://ripple.com/)

Benzinga Fintech Summit: [https://benzingafintechsummit.com/](https://benzingafintechsummit.com/)

Kamran is a Venture Partner at Greycroft, where he has led a number of deals for the firm in the areas of mobile platforms, payments & commerce, and financial technology.

At Greycroft, Kamran has led the fund’s core investments in Azimo, Boxed Wholesale, Fortumo, and Recurly, and driven the firm’s seed investments in Bread (fka Lon), Highlight, Cord, and Dasher. He also led Greycroft’s prior investment in Venmo (acquired by Braintree), Braintree (acquired by PayPal), and BalconyTV (acquired by Orchard).

**Links:**

Kamran: [https://www.linkedin.com/in/kamranansari1/](https://www.linkedin.com/in/kamranansari1/)

Greycroft: [https://www.greycroft.com/](https://www.greycroft.com/)

Benzinga Fintech Summit: [https://benzingafintechsummit.com/](https://benzingafintechsummit.com/)