If the pandemic has taught us one thing, it is this: Many customers agree not to have personal contact with their advisors. In fact, there are a few companies that have a proof of concept that the remote model works – and they do it very well.
And it took a 30-year-old CEO from Silicon Valley to give us more attention.
Because when the pandemic broke out, his law firm already had a working model in which clients interacted with their advisors remotely.
So in 2020 – while the world was closed – they grew fourfold.
The company is Facet Wealth, founded by Anders Jones, an outsider in the wealth management industry.
Anders saw an opportunity to serve customers who no longer fit into the large corporate form. It was a scenario driven by the DOL trustee rule that financial advisors must act in the best interests of their clients – but in a commission-based structure that was more difficult to accomplish.
So in 2016, Anders took a “fundamental” approach and developed an independent, fixed fee company that focused on the untapped market of wealthy mass customers, many of whom were outside the minimum wealth required for large corporations. Facet bought the customers who had lost their consultancy relationships – a concept that formed the basis for the emerging company.
But it was his mother’s vision that Anders recognized as a “deep lesson” for him. Her career has been focused on making 401 (k) retirement plans more accessible to ordinary people – first at Fidelity and later at T. Rowe Price. In her words, “Millions of Americans are helping save for retirement.”
In a different way, Facet sees his mission as picking up where mother left off by “helping people achieve financial well-being”.
To achieve this, Anders sought completely conflict-free advice – free from the ties that tie fees to assets. Instead, Facet charges an annual flat fee that reflects the services provided.
But how does a company make money with a fixed subscription model? Anders’ fintech background shines here.
And it seems to be working. In addition to outstanding growth, the company has raised more than $ 60 million in venture capital with support from Warburg Pincus.
Anders was trained at Stanford with an MBA from Wharton and has a unique business approach – undoubtedly from a dozen years as an early-stage investor in emerging technology markets as a founding partner at Argyle Ventures and prior to that at the adtech company LiveRamp.
In this episode, Anders shares his story with Louis – and offers a unique entrepreneurial perspective that is both philosophical and analytical – including:
- The key factors in Facet’s success – and how this unique model serves as a template for financial planning companies of the future.
- His background in the fintech industry – and how he took a different approach to technology that should not replace consultants, but rather make them more efficient and scale them.
- The strategy of targeting an “overlooked” group of customers – and how Facet’s subscription model enables their advisors to serve those customers effectively while generating revenue.
- The impact of Warburg Pincus ‘investment – and Anders’ view of acquiring a capital partner.
The future is wide open to entrepreneurs like Anders: who think autonomously, recognize a need and build from the ground up in order to solve it, instead of trying to rebuild from an existing chassis.
This episode offers a glimpse into the entrepreneurial mindset – and how that mindset is driving change in the wealth management industry.
Download the transcript of this episode …
Listen to more episodes of Mindy Diamond on Independence: A podcast for financial advisors contemplating change.
Mindy Diamond is the CEO of Diamond Consultants in Morristown, NJ, a nationally recognized boutique search and advisory firm in the financial services industry.