|Clients:||Financial advisors, individuals|
|Value proposition:||Financial, tax and legal services, advice, planning|
|The executive team:||David Snider, Founder and CEO
Lei He, Director of Engineering
Harness Wealth is a software platform for advisors and their clients. It serves to identify important events and key actions that can positively influence the financial wellness of an individual, such as life, financial, and career events, as well as connect clients with advisors using machine-learning algorithms.
I like having the opportunity to simultaneously interview a top executive and the top tech guy/gal. After speaking with David Snider, CEO, and Lei He, director of engineering, I now better understand how Harness Wealth helps people harness the full potential of their wealth.
David Snider has been in the finance industry for nearly 12 years. Over the course of his career he has worked as an associate at Bain & Co. and Bain Capital, where he consulted with Fortune 100 global banks and completed business and financial diligence on investment opportunities; as COO & CFO for Compass, a residential real estate tech platform, where he oversaw the development of tech-enabled services; and as an executive in residence for Bain Capital Ventures, where was responsible for developing strategies to identify emerging trends in FinTech. All of this experience has given him the opportunity to pursue consumer finance and create a sophisticated resource for people focused on maximizing their financial future.
Lei He holds a bachelor’s in electrical engineering/mathematics from the University of Michigan and an MA in mathematics in finance from New York University. Lei leveraged his finance and tech education at his first job out of college at Goldman Sachs. There, Lei built equity trading algorithms. Prior to joining Harness Wealth, he was involved in constructing machine-learning data infrastructure for Kensho.
Harness Wealth in a nutshell
Harness Wealth is a business-to-client solution that serves a variety of different clients, from moderately wealthy 30–55 year olds to those looking to invest inherited money. The company blends insights through tech and human expertise. Harness Wealth software draws information from a client’s current balance sheet and couples it with smart financial, tax and legal planning strategies based on specific, applicable opportunities. Seasoned human advisors cover the three main areas that ultra-wealthy clients focus on:
- Financial planning investment management
- Tax and trust management
- Estate law
“We have a vision that through technology we can provide the same experience to someone with a few hundred thousand dollars that someone with a few hundred million receives today through the smart intersection of these three areas.” – David
Harness Wealth embraces a business model that larger asset custodians have used for a long time: revenue share with advisors who use the platform (for some verticals). For the rest of the verticals, Harness Wealth doesn’t charge anything. This pricing strategy is based on being fair to all advisors. Additionally, Harness Wealth does not wish to make client relationships transactional.
Interestingly, David says his firm does not directly manage client assets, so they don’t need to integrate with custodians.
Main features of Harness Wealth
David says Harness Wealth works on three levels: The first is the interactive digital experience used to identify opportunities (life, financial, and career events). The second is the “Find an Advisor” workflow, which includes an algorithm that pairs clients with an advisor based on working profiles. The last level is the dashboard, which pulls together the first two levels and overlays financial integrations to create a single digital user dashboard.
Harness Wealth software collects qualitative (e.g., impact plan, life stages, financial concerns) and quantitative (e.g., connect accounts for financial institutions) data. Lei points out that this is the basis for the onboarding process, and it is the crux of the Harness holistic approach.
Find an advisor
David explains that the matching system is not purely tech. The “find an advisor” flow is made up of four layers:
- Rigorous review process – Created a process for reviewing potential advisory firms with the help of an advisory panel that includes David himself, the former head of the IRS, and two former CEOs of the largest US retirement investment platforms.
- Firms on the Harness Wealth platform – Identify the attributes in common for certain industries, investment risk profiles, and tax situations.
- Who do clients want to work with? – Ask clients the attributes of who they would prefer to work with, personality-wise, geographically, and so on.
- Capture client experience – Create an internal feedback loop with the help of algorithms to find patterns in advisor–client relationships.
“For example, people in real estate development really like working with John Smith, but it wasn’t a good fit for people that came from other backgrounds. We think there’s a pretty powerful feedback loop in having that ongoing relationship that we plan to leverage to make the platform better and better.” – David
Tech stack, product management, team structure
Harness uses React for the front end and Python for the back end. On the infrastructure side, Lei says they use Kubernetes for microservices and batch jobs. Data analytics and data science are similar to the Python stack. The platform uses a PostgreSQL database that runs on Google Cloud.
“We use a Google-managed PostgreSQL solution. Our tech stack is very cloud heavy, and then we try to be as cloud native as possible.” – Lei
The engineering team sets priorities and plans according to a standard agile methodology. Lei and the team set quarterly objectives and key results (OKR) that are aligned with the leadership team, business, and department goals. Sprints are planned on a weekly basis, and everyone works to reach the OKR.
Harness Wealth is a young startup, with 11 full-time team members. Apart from David, the CMO, the Head of Business Development, a BD Associate and a Concierge, the team includes five engineers and a product designer.
Security and quality assurance
Lei says the Google Cloud databases managed by the Google Cloud Platform come with a guaranteed security baseline. This means all the data are anonymized every time they need to be shared.
“We anonymize PII data and PHI data and have internal access rules, meaning that when data is accessed internally and both externally, we have Google’s IIP in front of all our infrastructure. So Google accounts authentication is always required.” – Lei
Harness Wealth has an automated CI/CD pipeline. Lei highlights that 88–93 percent of the codebase is covered by unit tests. For distributed microservices, the team has integrations tests. The engineers use Cypress IO for end-to-end testing to make sure the customer journey and all the features work correctly.
“Our product is already sophisticated enough that manual testing won’t cover 100% of the test cases. So that’s why a lot of those Cypress and integration tests become a great influence.” – Lei
Tech and business challenges
Any entrepreneur will tell you: finding a balance between building fast and building steady is one of the hardest parts of running a business. Early on, Lei and the leadership team decided to focus on quality but not strive to create a 100% foolproof product. As a business owner, I know that this balancing act is like trying to juggle chainsaws. Lei prefers the running and jumping at the same time analogy.
From the business perspective, David points out that nothing is one size fits all. The first challenge for Harness Wealth is to build a brand in financial services that looks, feels, and acts premium.
“The second challenge is it’s not always instantaneous. We’re not selling something where someone is making a snap judgment to purchase and acquire. And so you have to find the right way to inspire confidence in people, to be that guide for them in determining some of the most impactful service decisions they’ll ever make.” – David
WealthTech Club takeaways
Harness Wealth is a new kid on the block in the FinTech world. Regardless, David and his team have managed to create a supportive platform, providing services for advisors and clients at the same time. From what I heard in the interview, it looks like Harness Wealth is on its way to climbing up the financial advice and planning sector with its smart solutions and flexible product management.