Fintech Impact

Summary:

In this 6th episode of the Fintech Impact podcast, Jason Pereira, award-winning financial planner, university lecturer, writer, and host interviews Shawn Brayman, the CEO of PlanPlus, a prominent Canadian source of financial planning software. Jason and Shawn discuss how PlanPlus has grown, their focus on research, and how to evolve financial planning services ethically for their customers.

Show Notes:

●     01:23 – PlanPlus is Canadian-based company doing financial planning with a

                     multi-currency, multi-jurisdictional, and multi-lingual global platform—

                     focused on research and best-practices.

●     02:48 – PlanPlus spun out from a larger Hewlett Packard ISV back

                    in about 1985.

●     05:14 – PlanPlus acquired FinaMetrica from Australia, the home of risk tolerance

                    testing.

●     05:49 – In 2001, PlanPlus went to the cloud early.

●     06:42 – They have planners in 20-30 counties and about 50 that are supported

                     with the software.

●     11:34 – The merger with PlanPlus and FinaMetrica currently involved 60-70 of

                    PlanPlus’ clients using FinaMetrica.

●     21:10 – Fintech is a redefinition of how we can apply technology.

●     26:33 – Millennials are used to immediacy. If Amazon can ship purchases in the

                    same day, why does it take so long to pull together data for financial

                    planners?

●     30:30 – Amazon is talking about getting into checking accounts.

●     32:27 – PlanPlus’ has a research commitment to focus on science and not personal

                    biases.

●     38:42 – The Journal of Financial Planning and the Financial Services Review by

                    the Academy of Financial Services are the key industry journals.

●     40:07 – Canada is in the bottom 10% on planet Earth for what they charge in

                    embedded fees.

●     44:15 – In Australia, only 25% of financial planners pass the competency test.

3 Key Points:

1 PlanPlus acquired FinaMetrica from Australia, the home of risk tolerance

  testing.

2. Millennials are used to immediacy. Data for financial planners needs to catch up to that faster speed.

3. The Journal of Financial Planning and the Financial Services Review by the Academy of Financial Services are the top industry journals.

Tweetable Quotes:

-     “Basically, PlanPlus was actually a spin-out from a larger Hewlett Packard ISV back

       in about 1985.“ – Shawn Brayman

-     “Customer-wise, we have planners or advisors…running around 20 to 30 different

       countries.“ – Shawn Brayman

-     “Canada is in the bottom 10% on planet Earth for what we charge in embedded 

       fees.” – Shawn Brayman

Resources Mentioned:

● LinkedIn – Jason Pereira’s LinkedIn

● Facebook – Jason Pereira’s Facebook

● Woodgate Financial – Website for Woodgate Financial

● LinkedIn – Shawn Brayman’s LinkedIn page

● Twitter – Shawn Brayman’s Twitter page

● PlanPlus – Shawn Brayman's Twitter page

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Summary:

In this 5th episode of the Fintech Impact podcast, Jason Pereira, award-winning financial planner, university lecturer, writer, and host interviews Cato Pastoll, the Co-Founder and CEO of Lending Loop – an alternative lending source. Lending Loop mixes peer-to-peer lending with crowdsourcing along with artificial intelligence. Find out the story from Cato Pastoll about how in 15 months Lending Loop has managed to give out over $16 million in loans – and has an average monthly business growth of 20%. 

Show Notes:

●     01:02 – Lending Loop is an online lending marketplace. They connect

                    Canadian investors that are looking for more attractive returns on their

                    savings with small businesses that are looking for a more affordable source

                    of financing. 

●     01:34 – Both of Cato’s parents were small business owners, which taught him the

                    difficulties in finding financing. These lending platforms have been popular

                    in the UK since 2005 and since 2008 in the US, but not in Canada. Lending

                    Loop started in 2016.

●     04:00 – Marketplaces aren’t easy to start or scale – and it has been hard to do in

                    Canada because of the regulatory hurdles.

●     05:14 – Lending Loop lets you sign up as a lender or a borrower. They curate

                    applications, review them, and make sure they are credit-worthy. Only 10%

                    approval rate, over $16 million lent and about $2 million per month with a

                    20% monthly growth rate.

●     06:24 – Loans are crowdsourced, you can pledge as little as $25 towards a loan.

                    You can build a portfolio with $2,500 across 100 different companies if you

                    wanted to.

●     07:44 – You are able to establish the criteria for the types of businesses you lend

                    to. Their auto-lend platform will allocate your money for you. Regular bank

                    deposits into Lending Loop are possible.

●     08:45 – The rates range from 5.9% to the mid-20%.

●     10:46 – QuickBooks is integrated with Lending Loop.

●     13:12 – Lending Loop makes money from an origination fee of between 2.5 to 6.5%

                   of the loan as a one-time fee, as well as a spread of a 1.5% annual fee

                   on every repayment.

●     14:20 – Businesses are given a letter grade based on the risk of repaying their   

                    loans – which also determines their interest rate, with worst percentage

                    being only about 10% risk of default.

●     16:33 – All of their success and all of their failures are posted directly on their

                    website for full transparency. The largest loan to date has been about

                    $200,000.

●     17:44 – The main focus is to scale the platform.

●     19:04 – The market reception and demand has been great. There has been

                    skepticism from the more traditional members of the industry.

●     20:38 – Low investments have allowed people to try it out to make sure it is real –

                    then invest more later.

●     22:05 – Businesses provides a summary of what they are looking to use

                    the money for, what the business does, why they are safe to lend to, a little

                    bit about their financial performance.

●     24:26 – The challenges have included: general awareness, and providing financial

                    literacy for people.

●     26:42 – Lending Loop currently has a team of 20.

●     30:47 – The demographics of the borrowers: no industry makes up more than 9%

                    of the portfolio and lenders have been coast to coast.

●     35:00 – After building it out, seed capital came from family and friend – then a first

                    round of funding.

3 Key Points:

1 Only 10% approval rate, over $16 million lent and about $2 million per month with a

  20% monthly growth rate.

2. You can set the criteria for the types of businesses you lend to. Their auto-lend platform will allocate your money for you.

3. All successes and failures are posted on the Lending Loop website for full transparency.

Tweetable Quotes:

-     “We actually only approve about 10% of the businesses that are applying for

        financing with us .“ – Cato Pastoll  

-     “You can set the criteria for the types of businesses you want to lend to .“ – Cato Pastoll  

-     “So the business provides a write-up and a summary of what they are looking to use

       the money for, what the business does, why they are safe to lend to, a little bit

       about their financial performance.“ – Cato Pastoll  

Resources Mentioned:

● LinkedIn – Jason Pereira’s LinkedIn

● Facebook – Jason Pereira’s Facebook

● Woodgate Financial – Website for Woodgate Financial

● Lending Loop – Jason Pereira’s Facebook

● Cato Pastoll – LinkedIn page for Cato Pastoll  

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Summary:

Welcome to the 4th episode of the Fintech Impact podcast, where Jason Pereira, award-winning financial planner, university lecturer, writer, and host interviews the CEO and Co-founder of Onist Technologies – Brad Kotansky. Onist Technologies is an Arizona-based online platform that allows users to aggregate all of their financial data and to be able to work with multiple professionals. Brad Kotansky breaks down exactly what Onist Technologies is and what they are creating for the financial technologies industry and consumers. 

Show Notes

●     01:32 – Onist connects households and family members with their financial data,

                    accounts, and documents and are allowing granular access. They are sort

                    of like the company Mint on steroids.

●     03:55 – Seed for Onist began with Brad’s Dad needing him to take care of his

                    finances.

●     06:04 – The business-to-consumer market is a focus, with 15-18% of current users

                    not being consumers.

●     06:56 – For financial advisors, it is not about beating the SMP, it is about risk

                    tolerance – especially with elderly clients that don’t need high risk options.

●     10:10 – Having the client map out who the key stakeholders are in the family offers

                    optimum insight. Corporate organizational charts can be created within

                    1-10 minutes that can be updated to save money.

●     11:38 – Onist thinks about collaboration in two parts: connect clients to the platform

                    and allowing for direct messaging – include clients and professionals.

●     12:52 – CTO has 20 years of machine learning and AI experience.

●     14:28 – One third of the United States population is over 50 years old. 20 million

                    people are going to be added to that group in the next 10 years.

●     15:08 – The 18-49 demographic will grow by 6 million in the next 10 years.

                    Fintech’s focus is on millennials who are less intimidated by technology.

                    The average age of a caregiver in the United States is 49.

●     17:31 – Security and privacy are two separate areas for Onist. Personal data and

                    asset data are stored in separate data bases.

●     20:23 – Onist isn’t trying to go after the Mint market. Out of the 50+ market, 45%

                   share their login info.

●     21:14 – Onist tries to prevent elder abuse of accounts by being a read-only site.

●     22:22 – Data access is a tricky topic and a major issue with different countries

                    trying to push the envelope in that area.

●     27:37 – Blockchain is a paradigm change that is in the process of happening. Chip

                    technology and tap-to-pay happened earlier in Canada than the United

                    States.

●     30:52 – Security standards take time to change across the board.

●     34:25 – Onist costs nothing for the platform for the moment, there will be a monthly

                    subscription and a per-household per month fee. .

3 Key Points:

1 The business-to-consumer market is a focus, with 15-18% of current users

  not being consumers.

2. The average age of a caregiver in the United States is 49.

3. Onist costs nothing for the platform for the moment, there will be a monthly subscription and a per-household per month fee.

Tweetable Quotes:

-     “Onist, spelled on-ist…we want Onist. Onist advice, Onist opinions, Onist 

      relationships.“ – Brad Kotansky.

-     “The world is connected a million different ways…but when it comes to finance, we

      still operate in the dark ages.“ – Brad Kotansky.

-     “Approximately 15-18% of our users right now are actually not consumers, they are

       enterprise firms.“ – Brad Kotansky.

Resources Mentioned:

● LinkedIn – Jason Pereira’s LinkedIn

● Facebook – Jason Pereira’s Facebook

● Woodgate Financial – Website for Woodgate Financial

● Brad Kotansky – Brad Kotansky's LinkedIn

● Onist Technologies – Website for Onist Technologies

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Summary:

During the 3rd episode of Fintech Impact, Jason Pereira, award-winning financial planner, university lecturer, writer, and host interviews Paul Resnik, Co-founder and Director at FinaMetrica. As a risk assessment company, FinaMetrica provides tools for financial advisors to figure out the risk tolerance of their clients. Paul Resnik shares his history in the industry, the uphill battles that FinaMetrica has faced, and what it will take to turn financial advising into more of a science than an art.

Show Notes

01:55 – Paul Resnik started FinaMetrica in 1994, but Paul has been in the industry

                    for almost 50 years.

●     02:17 – Changes in Australia occurred: the ability to consolidate investment

                    products onto a single platform and people not being prepared for their

                    portfolios crashing.

●     04:25 – Risk asseement was met with hesitation back in 1994 and now. Planners

                    often find it intrusive.

●     07:26 – FinaMetrica took four fours to assemble the 25 questions used in their

                    psychometric test – after trying out 150 questions. They have done almost

                    1.2 million tests.

●     09:08 – Men tend to be more risk tolerant than women. Financial workers and

                    highly confident people tend to be more risk tolerant than their clients. 

                    Factors that tend to not have any impact are age, education, and 

                    experience.

●     11:47 – FinaMetrica charges the most in the global marketplace for their risk

                    tolerance test. Their clients tend to be personal financial advisors in the

                    approximately 20 countries that they work in.

●     12:17 – FinaMetrica starts with a 25 or 12 question questionnaire to measure

                    financial risk tolerance juxtaposed against ethical, physical, and social  

                    tolerances to determine an average score and range.

●     16:56 – They link results to portfolios that have ranked at a similar level against a 

                    range of scenarios including: nominal returns, highs and lows, adjusted for

                    inflation, 10 worst falls, how long it took to crash and recover, and 10

                    highest rises.

●     21:56 – FinaMetrica, based in Australia, is merging with PlanPlus, a financial

                    planning company based in Toronto Canada. 90% of FinaMetrica’s

                    revenue is international. They integrated their systems roughly 10 years

                    ago and have looked for joined clients.

●     24:49 – The cost to implement FinaMetrica into their practice: $800-900 a year in

                    various countries.

●     26:15 – Thinking fast is our great survival. Thinking slow hurts, because people are

                    too busy thinking and not paying attention. People thinking fast are using

                    mental shortcuts/intuition.

●     29:31 – Survey in Georgia of financial advisors had results all over the place –

                    including the same client that received different answers from the same

                    planner.

●     35:00 – Planner’s unfortunately often project their own level of risk tolerance onto

                    their clients and the people running the money project their risk tolerance

                    onto the advisors.

●     37:13 – Paul Resnik left the corporate world in 1991 and established a life company

                    and an asset management business a few years prior to that.

●     38:29 – Competitors of FinaMetrica include: Oxford Risk in the UK and in Riskalyze

                    in the United States. 

●     41:17 – Paul Resnik is not a fan of Target Date Funds.

●     42:57 – Technology Tools Today is a US company for financial advisor technology

                    that puts out an annual survey. FinaMetrica has the highest user rating.

3 Key Points:

1. Risk tolerance is a personality, and personalities tend not to change.

2. FinaMetrica starts with a 25 or 12 question questionnaire to measure

   financial risk tolerance juxtaposed against ethical, physical, and social  

   tolerances to determine an average score and range.

3. The cost to implement FinaMetrica into their practice: $800-900 a year in

                    various countries.

Tweetable Quotes:

-   “We measure risk tolerance scientifically. We use a psychometric test…it took us four years to put together our 25 questions.” – Paul Resnik.

-   “Risk tolerance is a personality trait. Personality tends not to change.” – Paul Resnik.

-   “We are fighting for mind space. We are fighting for people to stop long enough and listen.” – Paul Resnik.

Resources Mentioned:

● Facebook – Jason Pereira’s Facebook

● LinkedIn – Jason Pereira’s LinkedIn

● FinaMetrica – Website for FinaMetrica

● Paul Resnik – LinkedIn for Paul Resnik

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Summary:

In this second episode, Jason Pereira, award-winning financial planner, university lecturer, writer, and host interviews Kevin Kliman, CEO and Founder of Humi – an HR software company. Kevin shares the highlights of his journey, what his company Humi is seeking to accomplish, and Humi’s impact on the financial space.

Show Notes

00:41 – Humi is a fintech company because in addition to its subscriber model, they

                    introduced payroll and becoming the group insurance broker for the

                    companies that they deal with.

●     01:24 – Humi acknowledges that Zenefits – a SAS company - created their

                    business model: give away software and make money off of insurance

                    sales.

●     01:41 – Zenefits rose to a valuation of over $1 billion.

●     01:46 – Kevin Kliman and Humi graduated from Y Combinator – one of the

                    biggest incubators in the United States.

●     02:42 – Kevin explains Humi as a cloud-based benefits, payroll and HR software,

                    trying to solve the problem of time being wasted reconciling multiple

                    isolated systems instead of running their business.

●     04:54 – Humi is Kevin’s first tech start-up and he is not from the world of insurance

                    and benefits. He is a licensed dentist and has experience building

                    businesses and soft-ware based companies on the side.

●     06:42 – Kevin Kliman became excited by the business model of Humi and met his

                    partners: Matt Loszak the technical lead, Simon Bourgeois the COO, and

                    Drew Millington the head of sales.

●     09:16 – The payroll application stemmed from merging with a company that was

                    already building it and it was attractive in its simplicity and being

                    web-based.

●     11:54 – Pricing model for companies coming on their is a SAS license fee with a

                    nominal cost per employee per month. Companies that choose to

                    make Humi their insurance broker will not be charged for the software.

●     13:05 – The partner route is attractive to Humi, which has 30+ people, but it comes

                    down to bandwidth.

●     15:12 – Humi sees a lot of promise in being an end-to-end solution for both

                    employers and employees.

●     18:00 – The goal is becoming a leader in the HR, payroll, and benefits space, and

                    revamping performance management for companies.

●     20:05 – Humi’s team went from zero to 30 in 2-3 years.

●     22:41 – Humi’s target customer has changed significantly from companies that are

                    10-30 people from companies that are 50-200. Bamboo HR has been a

                    competitor.

●     27:30 – Interaction with the broker space is still early and how to support them

                    properly. Humi has been able to give quotes in 80% less time.

●     30:51 – Put your client first and satisfy their needs. Embrace the future.

●     32:40 – Integrations with Zero and Quickbooks, Group RSP providers are goals of

                    the company.

●     36:59 – For employees that use Humi every month – 50% log in every day.

3 Key Points:

1. Humi graduated from Y Combinator – one of the biggest incubators in the United States.

2. Companies using Humi pay a base fee to use the software and a nominal cost per employee per month. Companies that choose to make Humi their insurance broker will not be charged for the software.

3. For employees that use Humi every month, an astounding 50% log in every day.

Tweetable Quotes:

-   “Humi is cloud-based payroll, benefits, and HR software.” – Kevin Kliman.

-   “Payroll is its own beast. It has to have connections to all of the banks…which is tough to do.” – Kevin Kliman.

-   “If you think about the best way to service your client, you are going to win in the long run. .” – Kevin Kliman. 

-   “In general we (Canada) are about four years behind the states when it comes to technology…mostly because we are 1/10th of the size.” – Kevin Kliman. 

Resources Mentioned:

● Facebook – Jason Pereira’s Facebook

● LinkedIn – Jason Pereira’s LinkedIn

● Humi – Website for Humi

● Woodgate Financial – Sponsor of Fintech Impact podcast

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Summary:

Welcome to the very first episode of the Fintech Impact podcast, with Jason Pereira, award-winning financial planner, university lecturer, writer, and host of this show that offers expert insight into the Fintech world of financial technology. Today, Jason interviews David Nugent, the CIO and Co-Founder of Wealthsimple, Canada’s largest robo advisor and digital investment solutions for clients.

Show Notes:

●     01:10 – Wealthsimple is a robo advisor that started in the Fall of 2014, and now

                    services about 60,000 clients with offices in Canada, United States, and the

                    UK.

●     01:34 – Power Financial is the main backer of Wealthsimple thanks to about $165

                    million in capital with a millennial investor client base and B2B offerings.

●     03:13 – David Nugent’s personal journey includes: starting out in the business at 22

                    “asking businesses owners for their life savings” as an advisor and shifted

                    from advice to technology.

●     04:42 – Wealthsimple focuses on the customer experience. Most of the team

                    comes from technology and design, less from the financial world –

                    addressing problems from a usability standpoint. 

●     05:11 – Millennials are great clients because they are at the start of their careers, 

                    have a lot of future earning power and life transitions ahead, and possible

                    inheritances.

●     05:59 – On the advisor side of the business, it’s how do you help advisors service

                    more of those clients that are intimidated, while still allowing them do the

                    planning.

●     09:04 – The reaction to the advisor company towards Wealthsimple in the financial

                    planner sector has really been onboard.

●     10:13 – Wealthsimple is unique in that they are a robo advisor that operates in

                    multiple counties. The UK has proven to be at the forefront of regulatory

                    change.

●     11:14 – The scope of size of the U.S. is that the financial industry in Canada is

                     smaller than that of just the state of California.

●     12:22 – There is a challenge in the cost of acquisition.

●     14:56 – Wealthsimple has maintained a great relationship with Power Financial,

                    who have made about a dozen acquisitions in wealth, insurance, bank, and

                    credit card areas.

●     16:40 – The average age of a Wealthsimple customer is 31.

●     17:57 – As far as accounts in the United States, about 50 cents on the dollar has

                    been allocated to socially responsible investing. 

●     20:02 – One dollar accounts are possible to democratize investing and remove all

                    excuses people have for not getting started.

●     22:25 – Data collection and behavioral nudging has begun with a card system

                    within the application.

●     24:54 – Nontraditional marketing for Wealthsimple has stemmed from hiring a

                    brand leadership team, and none of them come from the financial services

                    industry.

●     27:24 – “Investing for Humans” is a tagline that underlines Weathsimple’s push to

                    talk with clients and not down to them just to “sound smart.” They won

                    back-to-back Webby Awards (like the Oscars of the Internet) for Best

                    Financial Services Website globally – with two different websites.

●     29:13 – They would like to start to offer more products.

●     31:25 – The Wealthsimple value proposition to the end client is democratizing

                    investing. On the advisor side, it is that plus automating and

                    systematizing the operational workflow that they do daily.

3 Key Points:

1.  Millennials are key clients that offer a whole lifetime of earning power still ahead of them, major life stages ahead like buying a house, and possible inheritances down the line.

2.  Empower the good advisor to do more business, and expose the bad advisor, and they are going to be in trouble.

3.  One dollar accounts are possible to democratize investing and remove all

     excuses people have for not getting started.

Tweetable Quotes:

-    “When the Canadian model got up and running, the biggest difference between the two models is that we had to call every single client with a phone call. Where in the U.S. none of that actually happens.“ – David Nugent.    

-    “Good advisors who want to do holistic planning don’t want to spend their time doing paperwork. They want the transparency, they want the efficiencies. And we are basically giving it to them.” – David Nugent.    

-   “Millennials, in our minds, are fantastic clients because they’re just at the beginnings our their careers. They’ve got a whole lifetime of earnings ahead of them .” – David Nugent.   

Resources Mentioned:

● LinkedIn – Jason Pereira’s LinkedIn

● Facebook – Jason Pereira’s Facebook

● Woodgate Financial – Website for Woodgate Financial

● Lending Loop – Jason Pereira’s Facebook

● Wealthsimple – Weathsimple Website   

● David Nugent’s LinkedIn –LinkedIn for David Nugent

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