Tuesday, December 9, 2014

Blooom, Betterment, LearnVest, Future Advisor, & Macroaxis Reviews

Did you notice the investing trend for 2014?  If you missed it, 2014 was the coming out party for companies whose services democratize investing.  Problems create innovation opportunities.  In the U.S. we have a huge economic problem that without solutions has the potential to destroy not only our economy, but indeed, our entire existence as a nation.  That problem is of course the wealth gap.   

On the page, "For Investors," I profiled three companies (that are democratizing investing) I really like with an obvious bias for one, Rich-Uncles.  The other two: Prosper and Wealthfront.  Below are five other start-ups that are also democratizing investing and investing services.  CCM's goal at this juncture is to simply introduce these companies to you.  CCM would like to establish relationships with these companies in order to learn more about them and offer this learning to you, my loyal readers.  Why?  So you can decide if these are companies you want to do "business" with.  We're in the Social Age.  It behooves these small companies to unveil themselves to us.

Democratizing investing/investing services is wonderful, and we applaud the founders of these start-ups.  However, what hasn't been democratized is a foundation of trust between the people (upper lower class to middle-middle class) and wealth building providers.  And Spanish.  These companies, if they intend on growing beyond the English speaking investor, will need to translate their platforms, build some major trust with the Latino community, and inspire risk taking with this group to set themselves apart.

Company Name/Location
Summary of Service
Blooom/Overland Park, KS
Chris Costello
Need help with your 401K?  Self-directed 401K plans are great…if you know what to do with your money and have time to actually do something!  Check out this great video: blooom.com/blog/
How and what types of equities/securities are chosen by Blooom’s proprietary software?  
Betterment/New York/NY 

 Jon Stein
Betterment is the rival to Wealthfront.  They too will create a low cost, tax savings portfolio of ETFs fully diversified and allocated with ongoing rebalancing for you.  Here's a great review: investorjunkie.com/betterment-review/
"Automated investments, with a human touch."  Could this be what sets Betterment apart from Wealthfront?
LearnVest/New York/NY 
 Alexa von Tobel
Are you just a mess when it comes to saving money and budgeting?  Do you need a "coach" to keep you focused?  For $70 a month, you'll get matched up with a Fin planner for advice, even investing.  Review: investorjunkie.com/learnvest-review/
Work description of the relationship between fin planner and customer.  Strictly email?  
 Future Advisor/San Francisco/CA
 Bo Lu
Advice and Automated Investing Services.  FA is similar to Betterment however you don't have to transfer assets to their company.  They will link up with your custodian (TDAmeritrade and Fidelity only).  Review: investorjunkie.com/futureadvisor-review/  
Are the annual fees for premium service (a little high at 0.5% of all assets managed) used to cover the DIY Advice Plan?  (Passing on costs to actual consumers?)
Macroaxis/San Francisco/CA 
Privately HeldIf you have a stock portfolio and manage it yourself, you're probably always wondering if your risk is as low as it can be to attain the highest reward possible, then Macroaxis is for you.  Easy to use and affordable.  This investment management service is one of the first auto-rebalancing platform on the fintech internet.  Review: http://www.barrons.com/articles/Getting the biggest reward for your risk   The "Bronze" package is $7.99 a month.  What you get for this package is enough for most individual investors if you can stand the ads. Pay yearly and save 25%!

Democratizing Services...What a headache!

So many choices!  What's a small investor to do?  Clearly, the opportunities for getting investing and retirement planning services are out there now more than ever.  Especially for us.  It will be up to these start-ups to cultivate positive experiences with their customers while they fight for their own existence.  The competition among them will be fierce, even though they have distinctions that set them apart.  Expect more companies to launch in the future.  Right now, there is plenty of money to keep the trend going.  However, when that dollar in our hand has six to ten other hands with palms up requesting it, who we decide to entrust this dollar with will not be decided by fancy algorithms, websites, credentials, degrees, or how much money they can raise from private equity.  No it will come down to this:

1) How does the company empathize with its customer?
2) How does the company build trust from point a to point b?
3) How does the company respond to their mistakes? Mistakes (miscommunication, misunderstandings, misinformation, etc.) with customers will be made, and they (CEO on down the chain) are more prone to making them on social networks.  Humility is the price of doing business in the 21st Century.

Mr./Mrs. CEO, when you come down to our level you will be in for a culture shock.  Wealthy people can go golfing and not have to worry during all 18 holes about having to eat Top Ramen noodles indefinitely if their investments don't pan out.  On the other hand...I'm like a hawk and a wolverine (a Hawkerine or Wolverawk?) when it comes to my money.  And I suspect so are many of my small investor peers.  You're going to have to treat us like pandas, even when we act like hawkerines.  I'll give you one chance...maybe two.

Thanks for reading!  Follow me @CosvaGomez.       

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