Facet Wealth is formally launching its flagship tech-advisor hybrid, a financial-advice-as-a-service for employers. The firm made the announcement in an email to WealthManagement.com, while noting that it had raised $25 million in a Series B funding round led by Warburg Pincus. The latest funding round means the hybrid wealth management firm has now brought in $62 million in business investments.
Facet Wealth will use the funding to support its direct-to-consumer business, as well as expanding its financial planning service as a “complement to existing benefit offerings” from employers, according to the announcement. Early users of the product are MyVest, Chili Piper and ClassPass.
“The approach is giving employees expert advice on their benefits package, as well as an expert to guide their individual financial plan and goals,” according to a company spokesperson. Ultimately, Facet Wealth is providing employees with free financial “coaching sessions,” a benefit that employers don’t pay for either—at least initially.
“The employer investment stems in helping Facet Wealth get in front of their employees and in some cases subsidizing the cost of the planning fees [when employees become clients],” said the spokesperson. The sessions convert into paying Facet Wealth clients at a rate of around 20%, she added.
Anton Honikman, CEO at MyVest, said he was "intrigued" by Facet Wealth's business model from the outset and saw Facet's move as an opportunity to help MyVest employees. "We have aligned incentives on growing adoption among MyVest employees, so we're partnering closely on that," he explained. "I'm very optimistic that this will be beneficial for MyVest employees and their other enterprise clients, as they grow out the workplace benefits channel."
Facet Wealth’s expansion into the employer market provided investors with even more confidence in the company and its disruption potential, said Jeff Stein, managing director at Warburg Pincus, in a statement. “Since our first investment two years ago, the Facet Wealth team has proven their ability to meet a unique consumer need, evolving and expanding their offering to build a truly innovative client experience and business model,” he added.
Industry partnerships are key to that growth, said Chip Roame, managing partner of Tiburon Strategic Advisors and a board member at Facet Wealth. Capitalizing on employees’ confidence in services associated with their employers will allow “forward-thinking employers to play a major role in their employees’ financial wellbeing,” he said. That confidence is crucial, because around 75% of Facet Wealth’s clients have not worked with an advisor before, according to the firm.
Turning to employers is the latest for a firm that’s not afraid to go after clients that other advisors may turn away. Facet Wealth has acquired clients by looking to RIAs that want small clients off their books and has even bought clients from firms that have sold themselves to fintechs.