What’s Next After 6 Years of Roboadvice
A Hard Fork
This is hard to say, but I am ending a 6-year personal journey in roboadvice and digital wealth management to expand focus to the entire financial services ecosystem.
Bottom line: I am joining a London-based research firm , where I will work on global Fintech analysis and understanding the fundamental future of finance broadly. Though I am stepping back from a day-to-day operating role at Vanare | NestEgg, I remain a shareholder / partner and will continue to participate in Vanare’s vision and strategy as a member of the Board of Directors.
This was not an easy decision. My work on the digitization of financial advice is what led to inclusion in ThinkAdvisor’s IA25 and the Investment News 40 Under 40. My colleagues at Vanare are more than just business partners — they have become close personal friends. To some, it may seem irrational to move away from that comfort zone, putting at risk 6 years of hard work that is now being recognized, backed by an amazing technology platform, talented partners, and a prospect list of the largest financial institutions in the world. Here’s why I am taking another leap.
Founding NestEgg
Let me start at the beginning. In 2010, while getting a JD/MBA at Columbia University, I had an idea for the future of financial advice. It was entirely ridiculous for a full-time grad student to hatch this plan. But in fact, the idea ended up being completely 100% right. Of course other Columbia MBAs also got it even more right (i.e., Jon Stein of Betterment), but here’s my proof:
My two early partners were Ben Zhuk and Brooks Paige. Ben was a classmate at Columbia with experience building consumer web companies. Brooks was a close friend from Amherst College, with a talent for math and massive code bases. Below is a slide of a 2010 ideation document meant to convince them to work on a project called NestEgg Wealth.
With some perseverance and Photoshop, our first prototype emerged from Napkin to HTML/CSS:
and then, with a sprinkle of Python Code and a redesign, we created an alpha build in late 2010 and a beta in mid 2011:
What we had by 2012 was a fully developed concept with asset allocation, financial planning and data aggregation, all built on a bootstrapped budget. Unlike our peers, we weren’t positioned to market a large retail brand. Fortunately, we made a key strategic discovery. Why not partner with financial institutions and go to where the clients are already?
This way we could help investors, advisors and build a self-sustaining company in the process. Our private label roboadvisor was born — though it took another year until the word roboadvisor even entered the industry lexicon, and any institution actually started wanting one. Check out this NestEgg robot concept from 2013!
The Next Phase: Vanare
We were fortunate with timing and received several incoming acquisition offers from private label partners. During this period, I met two special people. The first was Vladimir Baranov, who joined in 2013 by taking over the reigns as CTO when Brooks had moved on to Oxford to study AI and machine learning. Vlad institutionalized NestEgg’s approach and made the tech more flexible. He is now CTO at Vanare, where he continues to scale the institutional-caliber solutions built for independent advisors and financial services companies.
The second stroke of luck was meeting Rich Cancro. Rich is a true leader with a proven passion for independent advisors and financial services firms, having spent a 25-year career at Pershing, Bear, JP Morgan and Merrill Lynch before founding Vanare in 2013. This team clicked together, and our joint Vanare chapter began.
I really mean this. Nothing is more important than partnership in an early stage company, and it is hard to find the right fellow adventurers. Many of those I met throughout the journey were unscrupulous or had sharp elbows, focused on cutting an imaginary pie rather than growing it. What a distraction! The team we built at Vanare is not only super talented, but also operates on the principles of integrity, trust and mutual respect for each other and our clients.
With Vanare, our “Peter Thiel” secret was that there is no difference between traditional clients and roboadvisor clients. People are people, they need help, and technology allows for the best help to scale to any asset level. We combined a client management and portfolio management foundation with Roboadvisor DNA before anyone else had done so, and built something defensible and unique. You can see other firms trying to catch up to what is without question the right answer — from Envestnet’s attempt with Upside, to Blackrock’s acquisition of FutureAdvsior, or Fidelity’s purchase of eMoney. Forgive me for saying that our solution is still way better!
Learnings and Conclusions
It has been a wild 6-year ride and I have learned a transformational fact. Tech is no longer “information technology” to be relegated to some attic. Tech and media are colliding with finance, like tectonic plates moving continents. Software is smarter than us, faster than us, scales infinitely, and is marginally free. Software wants to help everyone have everything all the time.
I have been thinking about this in my conference keynotes and have come to a conclusion. We humans need to focus on what we are good at, that which is special to us. What no robot will do is have human emotion, personal empathy, and the ambitions for art, expression and fulfillment.
Has the finance industry forgotten its purpose? The industry’s true reason for existing is to help people achieve their financial goals and aspirations, to encourage human flourishing by empowering them with the right financial solutions. Everything else is noise. And technology cuts straight through that noise by digitizing all the low value-add activity out of the ecosystem. It’s harsh, but great for consumers. It makes our lives better, more open and more free.
Vanare has taught me this on our roboadvisor journey, and now the company is steadily continuing to grow and commercialize these ideas. But the industry needs to do more, way more. Between the block chain, p2p lending, artificial intelligence, crowd wisdom, virtual reality, and cryptocurrencies, the entire Fintech paradigm has to be addressed.
To have the most impact, my mission is shifting to evangelizing this message across the traditional financial industry — from investors to large banks — and to show folks what the world looks like in the next 5–15 years. To do this, I will be joining an independent top-tier research firm focused on developing big picture thinking for our industry. I will share more on this in the next few weeks, but at a high level this firm is an independent advisor to the world’s largest financial institutions. They are dedicated to building a fundamental understanding of financial services across banks, insurers, diversified financials and fintech stocks. I will focus on helping them become the leading experts creating knowledge that drives the financial industry forward and results in better financial outcomes for people globally.
So at the end of the day, it all comes down to this for me: Change must come from the heart of the industry. I’ve seen firsthand the transformational impact of innovation and technology when that intersects with financial services, and the barriers to it from the inside. If we succeed in showing the value of innovation to those allocating billions of investment dollars into the industry’s future, then this decision to leave my day-to-day post at Vanare will have been worthwhile.
Going Forward
Vanare | NestEgg is both a great business and personal work of art. I have deep gratitude to the team and an appreciation of the journey. As mentioned, I will remain both a shareholder and a member of the Board of Directors, providing vision and strategic thinking to the company.
I am excited that Ken Manning, who has a proven track record of accomplishment in both bringing new technologies to market and leading an innovation organization has joined Vanare as Head of Product. Ken is a talented executive and product manager who helped start Razorfish, eMachines, Acer Online, Soundtracker, and one of the original digital incubators. He has already taken over my operational duties and will maintain Vanare’s culture of excellence. The company will continue to focus on combining user experience, design and innovation with institutional wealth management. The best thing I could do in this transition is hire someone more qualified than me to join the executive team at Vanare, and Ken is a true rockstar. The vision created over the past several years will thrive under the stewardship of this talented team.
Thanks for getting here with me. I am both scared and excited for this new fork in the road. I invite you to follow along.
