Three embedded finance experts joined the Lendit TV live session on Tuesday afternoon to advise firms looking to onboard Credit Card Offerings.
The embedded finance gig is booming, with everyone from Plaid to Cross River, and giants like Apple, Amazon, Paypal, and Google offering some form of payment option.
We are syndicating a deep conversation across roboadvice, high tech and payments, and fintech bundling that we had with Craig Iskowitz of Ezra Group Consulting.
Check out Ezra Group Consulting here to learn more about digital wealth and Craig’s consulting practice. He is one of the sharpest software consultants in the RIA space, and his firm works with wealth management firms and fintech vendors to provide technology strategy and market research.
We had a lot of fun in this conversation and cover TD & Schwab, Wealthsimple, M1 Finance, Ant & Tencent, and Robinhood, among others. The full transcript is provided along with the recording — worth a read for the illustrations alone.
Investing startup M1 Finance decided in December that charging 25 to 40 basis points was not working, so it decided to allow users to use their platform for free; since shifting to the free model the company has seen more than $1mn a day come onto the platform; rival robo advisors like Betterment and Wealthfront think the move is an act of desperation, though both companies offer or have offered some version free services; CEO of M1 Brian Barnes tells Business Insider, “M1 is very limiting from a trading perspective but it is a phenomenal tool for building a portfolio for the investments you want." Source.
In this conversation, we talk with Brian Barnes of M1 Finance, about finance “super apps”, the cost-efficiencies of robo-advisors, fractionalized share trading, and tackling the titans of the Wealth Management industry. We also discuss the nuts and bolts of the financial infrastructure making this possible.
M1 Finance bundles together roboadvisory, neobanking and lending into a single “super app”, allowing for combined pricing power (i.e., charging nothing on asset allocation). The firm currently has $3 billion in AUM, a growth of 50% in the past four months and tripling their total in just over a year. Notably, the company has its own broker/dealer and offers fractional shares, and partners with Lincoln Savings bank on the deposit accounts. That makes for a compelling business model from securities lending, interchange, and order flow.
Digital investment startup M1 Finance drooped their assets under management fees to zero in December; the company plans to make money through back end services and charges fees fopr paper statements, wire transfers and transferring to another brokerage; “It’s taking a similar approach to how the rest of financial services works,” CEO Brian Barnes said to TearSheet. “Banks make money on cash, assets, transaction revenue and the ability to cross sell — the more users, the more assets, and the more money M1 will make.”; the company current holds more than $100mn assets under management. Source.
