The Future Of Investing,Fintech 2019

Want half a share of Apple, or bitcoin alongside protective puts? The investing, trading and wealth management firms on Forbes’ Fintech 50 2019 offer more than just the services once exclusive to big banks and traditional financial firms. They’re tapping into markets by merging new tricks with the old.

Take, for example, the maturing roboadvisor market as it embraces the human side of advising. Pioneer Betterment added human advisors to its mix in 2017 and last year introduced the ability for investors to tailor their automated portfolio allocations. Further evidence of the hybrid-advisor appeal: Digital wealth management platform Personal Capital returns to the Fintech 50 list after announcing an Atlanta office in September to bulk up its team of more than 200 financial advisors, and its free online financial dashboard now claims almost 2 million users.

Meanwhile, the new generation of online brokers, which has largely forgone commission-based trading, gained millions of users in 2018. List-staple Robinhood doubled its customer base in the past year to more than 6 million, and newcomer Stash debuts on the list with 3 million users–around 80% of which the firm says are first-time investors. Expect increasingly diversified offerings in this space: Both Stash and Robinhood have announced banking plays due out later this year, in the form of a Visa-equipped debit account for the former and a cash management program for the latter.

Facilitated access to 401(k)s and private equity are also on hand in this year’s Fintech 50. Here are the six most innovative investing companies in fintech:

uncaptioned image

Founder and CEO of Betterment Jon Stein. (Photo by Noam Galai/Getty Images for TechCrunch)

Betterment, New York City

Robo-advisor pioneer manages ETF portfolios tailored to individuals’ goals and risk tolerance, held in taxable accounts and/or IRAs for 0.25% of assets a year. Customers with a balance of at least $100,000 can opt for newer hybrid premium service offering access to human financial planners, too, for 0.40% of assets a year. Betterment now also offers company 401(k) and financial advisor products.

Funding: $275 million from Bessemer Ventures, Menlo Ventures, Citi Ventures and others. Latest valuation: $800 million

Bona fides: Largest independent robo, managing $15 billion in assets for 400,000 customers

Cofounder and CEO: Jon Stein, 39, former banking consultant who started Betterment when he was just 28

Guideline, San Mateo, CA

Partners with advisors and employers to offer 401(k)s for an initial setup fee of $500 and $8 per month per participating employee. Guideline’s portfolios (made up mostly of Vanguard funds) have underlying fund fees averaging .06%; employees can opt to set their own portfolio allocation or follow Guideline’s personalized recommendations.

Funding: $59 million from Tiger Global Management, Felicis Ventures, Propel Venture Partners, and Lerer Hippeau. Latest valuation: $170 million*

Bona fides:  Since launching in 2016, has signed up 6,000 small business plans with $800 million in assets. Benefits provider Gusto uses Guideline as its 401(k) partner.

Cofounders: CEO Kevin Busque, age 40 (a former TaskRabbit exec); CTO Mike Nelson, 31; and Chief Designer Jeremy Caballero, age 36.

iCapital Network, New York City

Online platform iCapital Network allows high-net-worth individuals and their advisors to analyze and invest in private equity, private debt, venture capital and hedge funds with as little as $100,000 per fund, compared to the millions usually required for access to such investments. Pending acquisition of Bank of America’s alternative investment feeder fund business will add about $20 billion in client assets to iCapital’s existing $6 billion.

Funding: $80 million from Credit Suisse, BlackRock, Morgan Stanley, UBS, BNY Mellon and others

Bona fides: Nearly 70,000 investor accounts, after Bank of America acquisition

Cofounders: CEO Lawrence Calcano, 56, a 17-year veteran of Goldman Sachs; managing Partner Dan Vene and Managing Partner & Head of Research Nick Veronis.

Personal Capital, Redwood City, CA

Online wealth management platform offers a free dashboard to track all your bank and investing accounts plus free retirement planning and investment analysis tools. Paying customers get money management, loss harvesting and access to human financial advisors. Tiered annual management fees start at 0.89% of assets up to $1 million and go down to 0.49% for invested assets over $10 million.

Funding: $225 million from IGM Financial, Corsair Capital and others. Latest Valuation: $660 million

Bona fides: Nearly 2 million users of free software; $8 billion in assets under management. For more than 19,000 paying customers.

Cofounders: Bill Harris, 62, a former CEO of Personal Capital, Intuit and PayPal; Rob Foregger, also cofounder of NextCapital; and Louie Gasparini

Current CEO: Jay Shah, 49, who joined Personal Capital from E-Loan in 2009

uncaptioned image

Robinhood cofounders Baiju Bhatt (left) and Vlad Tenev.

Robinhood, Menlo Park, CA

Broker offers commission-free trading of stocks, ETFs, cryptocurrencies and options through a mobile app. Robinhood Gold subscription service, starting at $6 per month, gives investors access to margin trading. Later this year the firm will take on the checking & savings market with a new cash management program.

Funding: $539 million from NEA, Index, Thrive Capital, Sequoia, Kleiner Perkins and more. Latest valuation: $5.6 billion

Bona fides: More than 6 million customers

Cofounders and co-CEOs: Stanford grads Baiju Bhatt, 34, a second-generation American with Indian parents, and Bulgarian-born Vlad Tenev, 32

Leave a Reply