Advisors use digital advice platforms to attract millennials and next-generation clients. But most robos still require some basic financial literacy and, despite their user-friendly interfaces, might still be intimidating to new investors with no experience. How can a true beginner really know how they would react to a sudden market drop? Or what kind of account they should put their money into?
So when Fiserv was looking to add a robo component to its technology suite for financial services firms, it wanted a product that would give these potential clients a little more handholding. A tool that doesn't just bring millennials into a relationship with an advisor, but teaches them to be more financially savvy.
Fiserv announced Monday that it was going with GoldBean, a startup that participated in the INV Fintech accelerator Fiserv launched last year in partnership with Bank Innovation. GoldBean will be available to advisors on Fiserv’s Wealth Management Network and will be integrated into the Unified Wealth Platform.
Jane Barratt, founder and CEO of GoldBean, said that unlike other digital advice products built for young people who already “have a pile of money,” GoldBean is focused on beginners. With a background in digital marketing and advertising for the financial services industry, Barratt said she has always seen the gap between what advisors offer and what investors understand. Advisors want to engage with young investors and teach them, she said, but just can’t find a way to make the economics work.
GoldBean starts by analyzing the investor’s actual spending, then creates a portfolio featuring companies and brands they know and use every day.
“Instead of a traditional robo approach, we actually lead with, 'Show us where you shop and we’ll build you a portfolio,'" Barratt said. “It makes more sense to new investors. It’s easier to understand for someone who shops a lot at Amazon—they can see how much it grows by getting them one or two shares. It’s important to get them started.”
GoldBean then designs personalized education tracks using articles and interactive tools to teach everything from earning and saving to managing debt and growing wealth. There are even practice portfolios to help build confidence without risking actual dollars. While millennials are certainly the focus, Barratt says the platform can be used for investors of any age who are new to the industry.
Advisors can customize GoldBean with their own branding, as well as implement their own investment philosophies. Barratt said her team’s goal is education and building confidence, and imagines advisors will do much of the heavy lifting when it comes to strategy. She added that this was one of the major advantages of coming up through Fiserv’s tech accelerator.
“We heard from wealth managers in their own words what is working, what’s not working, and what they need,” Barratt said.
Fiserv’s president of investment services, Cheryl Nash, said her firm’s research shows that advisors are struggling to keep clients’ children at the firm. By personalizing the education through GoldBean, they can create a stronger interaction with next-gen investors while also helping them to grow their wealth.
As the industry changes, Nash said advisors need to become more than stock pickers and brokers; they’re going to have to become like life coaches.
“There is such a big need for helping with financial literacy and helping with education,” Nash said. “For kids coming out of college that have greater debt than they’ve ever had in previous generations, tools like this can help people go from spenders to savers and ultimately to investors.”