|Clients:||Households, families, mass affluent market|
|Value proposition:||Financial life management|
|The executive team:||Anders Jones, Chief Executive Officer and Co-Founder|
Facet Wealth is a financial life management firm that aims to harmonize technology with smart financial advice to provide clients with sub-million-dollar net worth access to individualized financial planning. The company recently raised $33 million in Series A.
Anders Jones has been involved in the technology and financial services world since 2008. He has worked on a number of interesting projects including LiveRamp, an advertising tech company that was sold to Axiom in 2014. In early 2016, Jones saw an opportunity to apply technology to offer high-quality financial advice to the mass affluent market and created Facet Wealth.
What makes Facet Wealth different?
Facet Wealth does not sell technology. Their end client is the household or individual, making them a business-to-client company. Jones says that his team includes full-time certified financial planners (CFPs) who are responsible for interacting with, advising, and supporting clients.
Rather than buying tools and putting them into a neat toolbox, Facet Wealth builds proprietary tech to improve the efficiency of CFPs, not replace them with robo-advisors. Technology allows CFPs to serve more clients, which in turn drives down the cost of services.
“Our tech is really a workforce efficiency tool. The main goal is to automate all the tasks that come with financial planning that are not client facing.”
Facet’s catalog of tech solutions includes a proprietary CRM and database that collates all readily available client information. Jones explains that the tech pulls all relevant data about a client and builds a financial plan with automated suggestions. This greatly reduces preparation time for advisors and allows them to focus on building a strong relationship with the client.
“We capture all of the advisor action. So when an advisor makes a recommendation to a client, we log that in the platform and then use that to make our recommendations smarter the next time around.”
How Facet Wealth manages clients
Facet’s average client is 55 years old with $350,000 in the bank, which means they’ve hit the peak for the assets they will accumulate. Of course, they can stay in the workforce and accumulate a little more, but it’s unlikely to be over a million dollars. In the industry standard advisory model, most advisors would charge 1%, meaning that their revenue is capped at $3,500.
Instead of looking at the client as a static number, Facet tries to understand what the client is going through in their financial life. It’s fair to say that these clients are thinking of retirement, are transitioning out of the workforce, and probably have tons of questions about retirement income planning.
“The client might have kids who are still in the house or about to go to college or in college. So they have that financial burden. It’s probably the most complex time in their financial life right in that moment.”
Jones went on to say that Facet Wealth advisors want to provide great service and value. They don’t care about how much time it takes—they’re willing to work with clients to set them up for the rest of their lives without charging and arm and a leg.
Technology and integrations
Facet has a team of 10 dedicated engineers who have built the platform over the course of the last three years. The platform includes a frontend, an advisor suite with all of the required workflows, a CRM, and financial planning tools. Clients have their own client portal where they can see their accounts and financial plans. Apart from the proprietary-built software, Facet integrates with Quovo for account aggregation and a secure file storage tool by which clients can upload pay stubs, wills, and trusts.
From a custodian standpoint, Jones says they use Pershing, Schwab, TD Ameritrade, and Fidelity on a case-by-case basis. Additionally, Facet integrates with Vestmark for trading operations.
Strong product management = strong product
Jones says that product management at Facet starts at the company level. Several times a year, the company organizes retreats where the management team discusses the top-five priorities for the coming year. Generally, the goals are broad—for example, achieving industry-best client experiences for the mass affluent market. The next step is to map out the tangible metrics to measure success and draw up quarterly goals
“We look at it as a finite journey. What are the product resources we need here? What are the tech resources we need here? What are the operational resources, and what are the marketing resources to provide a holistic client experience in the first 90 days from onboarding?”
After ironing out the details, the product management team takes over and works in tandem with the engineers to outline two-week sprints. As Jones explained, the goals are company-wide, and no development occurs “in a vacuum.” He is a big believer in transparency, and thanks to this, Facet’s Slack channel features product updates and upcoming features, meaning everyone is in the loop, whether they are advisors or engineers.
Challenges facing Facet Wealth
Jones cites the biggest challenge as proper scaling. In the last year, Facet has gone from 10 employees to 52. In 2019, the company plans to triple or quadruple in size to roughly 150–200 employees. Obviously, the resources and management style for 10 people isn’t the same as it is for a team of 200, so Facet’s executive team will need to figure out the best strategy to scale.
“The great news is we have great team scale players on the management level. For example, our head of operations used to run 1,500 people. Right now, he’s managing 10, but I’m very confident that he will be able to scale that team as big as we need it to get.”
The second-biggest challenge is keeping the company culture intact. Considering the majority of CFPs work remotely (in nine different states), Jones says that everybody has to feel like they are part of the team. To accomplish this, Jones will focus his attention on creating and maintaining systems and programs aimed toward uniting the company.
WealthTech Club takeaways
Facet Wealth isn’t reinventing the wealth management wheel. Instead, they have chosen to create their own software for internal use. These software tools make Facet’s advisors more efficient and increase the platform’s usefulness as a whole. Unlike advisors who buy a ready-made product, Facet’s team doesn’t need to customize anything—their tools have been built just for them and their clients. Jones and his team have a unique approach, and judging by their Series A, they are making the right decisions.