In yet another sign that technology is having a big impact on the wealth management industry, five leading RIA firms are banding together to create a “fintech” accelerator. Called ScratchWorks, this new platform is designed to identify and fund promising fintech startup companies and held its inaugural debut in a live session at the recently held Barron’s Top Independent Advisor conference.
In a format similar to the popular television show, “Shark Tank” three fintech companies presented their pitch live on stage to the five investors of the ScratchWorks collective in front of a capacity crowd of over 500 of the industry’s largest independent advisory firms.
These five investors from leading RIA firms including, Marty Bicknell of Mariner Wealth Advisors, Jon Jones from Brighton Jones, Richard Burridge of RMB Capital, John Eadie of Covenant and Michael Nathanson of The Colony Group, collectively manage over $60 billion in assets. Sponsored by Fidelity, eMoney and the University of Colorado’s Leeds School of Business, ScratchWorks attracted over 50 fintech firms to submit an application to pitch to these five investors for potential venture capital investments, strategic partnerships and distribution agreements.
After a rigorous review process with leading academics from the University of Colorado’s Leeds School of Business, 10 semi-finalists from the initial 50 submitting firms and ideas were identified for further consideration which led to the choice of 3 finalists selected to pitch live to the five ScratchWorks investors.
Those inaugural ScratchWorks finalist firms are InvestmentPOD, Circle Black and Snappy Kraken.
First up on stage was InvestmentPOD. CEO Jacqueline Ko Matthews who pitched her technology platform as a multi-strategy white-label robo advisor for advisors. “Everybody wants to build a portfolio that stands the test of time,” she said noting that every 10 years or so there has been a major market downturn that can significantly impact client portfolios, such as what occurred in 2008-2009 during the Financial Crisis.
Matthews’ idea is to leverage technology to create a platform that combines a multi-strategy portfolio management approach with both asset and strategy diversification that lowers costs that are typically paid to expensive outside money manager specialists. Through her automation, algorithms and technology, she is able to simplify the process and make it more accessible so that advisors can make these sophisticated investment strategies cost-effective for all of their clients, not just their high net worth clients.
“The current crop of robo advisors are over simplified and only provide one approach, passive indexing, which has become over commoditized. In order to justify their 1% fees,
advisors are going to have to provide a higher service level such as dynamic indexing, which historically has been done through manual efforts and expensive outside money managers. We are bridging this gap with InvestmentPOD by using robo automation to deliver a sophisticated multi strategy approach.”
The ScratchWorks investors were impressed with InvestmentPOD and saw a lot of promise in the platform. As a result, they made a significant, “exploratory” investment offer, which Matthews accepted.
Initiatives such as ScratchWorks will be a harbinger for the future of advisor technology as advisors themselves jump into the VC game to invest in their collective futures. To learn more about what went on at ScratchWorks, check out the many tweets on the #BarronsTIAS on Twitter.
CEO Jacqueline Ko Matthews pitched her technology platform as a multi-strategy, white-label robo-advisor for advisors.
“Everybody wants to build a portfolio that stands the test of time,” she said, noting that every 10 years or so there has been a major market downturn that can significantly impact client portfolios, such as what occurred during the financial crisis of 2007-2008.
“The current crop of robo-advisors is over simplified and only provides one approach, passive indexing, which has become over commoditized,” she explained. “To justify their 1% fees, advisors are going to have to provide a higher service level, such as dynamic indexing, which historically has been done through manual efforts and expensive outside money managers. We are bridging this gap with InvestmentPOD, by using robo-automation to deliver a sophisticated multi strategy approach.”
Introduction to ScratchWorks:
Meet the “Sharks”
Executives from technology vendors and wealth management firms discuss the future of the industry.
Technology is forcing change on all aspects of life, and the financial services industry is no exception. WealthManagement.com assembled some of the top executives from major technology vendors, custodians and registered investment advisors to discuss these issues and more at the the 2017 Wealth Management.com Executive Forum.
InvestmentPOD is one of only six companies named a finalist by wealthmanagement.com in the category for Disruptive Technology!
About the Event:
Now in its 3rd year, the 2017 Executive Forum and Industry Awards recognize the companies and organizations that support financial advisor success. It has as been expanded to include an afternoon program filled with keynote speakers, CEO panel discussions and breakout sessions covering prevalent issues around technology, asset management, broker/dealers and marketing — followed by our evening industry awards gala. Over 350 professionals attended the galas in 2016.
By recognizing outstanding achievement in the industry, the WealthManagement.com Industry awards will continue to inspire innovation and leadership among industry participants., creating an environment that will enable the industry to better support advisors in their roles as leaders to their clients and communities.
What does your firm do/offer within the fintech sector?InvestmentPOD is the industry’s first digital advice platform to offer multi-strategies, by providing a revolutionary approach for professional financial advisors to offer their clients sophisticated, customizable portfolios, along with enhanced trading and rebalancing capabilities. Unlike traditional “robo” investing platforms that only provide passive options, InvestmentPOD’s sophisticated investing algorithms provide multi-strategy and asset diversification, all while lowering trading costs.
Previously, this type of sophisticated approach was only available through a portfolio of hedge funds; however, hedge funds have shown to be an expensive and inefficient way to achieve these investing goals. Now, through the vast liquidity and global availability of ETFs, combined with InvestmentPOD’s advanced and sophisticated algorithms, advisors can enjoy the benefits of diversification, automation and lowered costs to take their firms to the next level.
One of the common knocks on the automated investing services is that they can only offer a simplistic buy-and-hold strategy that can’t produce alpha or defend against a market downturn the way a traditional advisor can.
It’s a fair criticism, says Jacqueline Matthews, a former Goldman Sachs investment banker who helped spearhead the firm's Asia Pacific business. Passive investing has major peak-to-trough losses that can devastate retirement portfolios, but most people cannot afford the other strategies that HNW advisors and family offices use to safeguard assets.
“The universal problem is everyone is trying to create a portfolio that stands the test of time and weathers the storm through all sorts of cycles,” Matthews told WealthManagement.com. So to create something that can work for investors big and small, Matthews launched a new robo advisor that combines passive, opportunistic and defensive – POD for short – strategies.
Up against robo advice platforms, advisers need to tap into tools from the investment banking world, says one ex-Goldman Sachs executive.
Launching her own white labeled platform for RIAs, Jacqueline Ko Matthews says that multi-strategy management allows advisers to distinguish themselves from automated passive, buy-and-hold offerings.
"We are digitizing the multistrategy approach," says Ko, CEO and founder of the newly launched InvestmentPOD. "We're taking what I used to do for UHNW clients. Wealthy people have always known you have to diversify across strategies."
The platform will offer 10 different strategies for advisers, with the option to create custom strategies, Ko says. The platform is ideal for advisers with $100 million in AUM, she says, though they can work with quick-growing practices too.
InvestmentPOD, a Washington, D.C.,-based robo advice provider for advisers, has launched a white-labeled version of its multi-strategy product that RIAs can offer to clients as their own.
InvestmentPOD for Advisors, as the service is known, is a multi-strategy and multi-asset-class approach to algorithmic advice, the company said in a release. Unlike other robo platforms that provide passive, long-only approaches, InvestmentPOD's algorithms are designed to deliver alternative, hedge-fund-like strategies through low-cost exchange-traded funds, the company said.
"Passive, buy-and-hold strategies have resulted in significant losses over market cycles," said Jacqueline Ko Matthews, CEO and co-founder of InvestmentPOD. "Research shows that combining opportunistic and defensive strategies to complement a passive portfolio generates equal or higher returns with less risk."
InvestmentPOD for Advisors, the industry’s first digital advice platform to offer multi-strategies, announced today the official launch of its white-labeled automated investing platform for independent Registered Investment Advisors (RIAs).
InvestmentPOD provides a revolutionary approach for advisors to offer their clients sophisticated investing strategies, customizable portfolios, and enhanced trading and rebalancing capabilities. Unlike traditional “robo” investing platforms that only provide passive options, InvestmentPOD’s sophisticated investing algorithms provide multi-strategy and asset diversification, all while lowering trading costs.
“History has proven that passive, buy and hold investing strategies have resulted in significant losses over market cycles,” said Jacqueline Ko Matthews, a former Goldman Sachs investment banker, wealth manager and now the CEO and co-founder of InvestmentPOD.
“With significant experience in investment banking, Ko Matthews has developed one of the most disruptive asset management platforms for institutional customers, brokers and insurance companies. Her company Investment PoD was a finalist in the 2016 BBVA Open Talent.”
InvestmentPOD is one of only twelve companies invited to exhibit & demo at TechCrunch’s legendary MeetUp & Pitch-Off – which came to D.C. on Tuesday, February 21, 2017.
About the Event:
TechCrunch’s legendary meetup + pitch-off event is coming to D.C.!
So join us for good conversation and a battle to the death as these select entrepreneurs try to dazzle and excite the judges in under sixty seconds.
And whether you’re an investor, entrepreneur, dreamer or tech enthusiast, we want to see you at the event so we can hear your thoughts.
Come one, come all. It’s sure to be a night to remember.
As the largest gathering of the advisor technology community outside Joel Bruckenstein’s T3 conferences, TD Ameritrade’s “Veo Village” featured the latest and greatest in advisor tech in 2017.
Held in early February at the TDA LINC conference in San Diego, Veo Village features the best of the 115 technology vendors who have integrated their systems and software with TDAI’s innovative Veo advisor workstation.