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22. Empowering People to Build Wealth with Michele Ferrario

22. Empowering People to Build Wealth with Michele Ferrario

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Key takeaways

  • We’re seeing increased competition in Fintech, pushing the industry to evolve and produce better products and services
  • The term Robo-advisory is limiting and does not fully encompass what the platform provides
  • The incentive structure in wealth management is completely misaligned and companies are profiting at the expense of their clients

StashAway is concerned with empowering people to live better financially. This week, Ned and Dani are joined by Michele Ferrario, CEO and Co-founder of Stashaway, to address the topics of building wealth and Robo-advisory.

Right off the bat, Michele shares with us that he does not like the term Robo-advisor and has avoided it. He feels that the term does not produce the right image and is limiting what the service platform provides. For their clients, rather than labelling the service as Robo-advisory, StashAway wanted to portray the problem that they were solving. The problem is that people in Singapore have a lot of cash savings. In Singapore, 36% of financial wealth is in cash accounts which is much more than the US, sitting at 14%. Those in Singapore are also being pitched products that are too expensive or not personalised. Rather than have their money sit around doing nothing, StashAway is determined to empower people to build wealth over the long term. This is the problem that StashAway focuses on and provides a solution for with their platform.

Currently, many people manage their money by going to a bank and sitting down with an advisor, only to be offered a mass market product with 2% per annum fees. Michele believes that the incentive structure is currently skewed towards banks and institutions rather than the consumer. In essence, a product is recommended to a client not because the client stands to benefit, but because that product creates more margin for the company. This model is extremely outdated and needs to change. As one who is driving change in the industry, Michele shares with us how he is excited to be part of this revolution in wealth management, helping the investment industry evolve and improve. One thing about StashAway that attracts expert investors is the high level of transparency. The process of investment is transparent and customers know how the money is being invested and where it is going. 

The Fintech industry is becoming hotter and many new players are coming to the table. Michele believes this to be a positive sign and appreciates how more positive bets are being placed on the industry. The COVID-19 pandemic has also accelerated this, further pushing the industry to evolve and digitalise their services. Ultimately, competition will drive the industry to improve, producing better products and services for clients. 

Towards this end, StashAway is doing amazing well with many positive reviews on App stores. Michele comments that it is satisfying knowing that something is going well for their customers and this positivity drives them to continue improving things. They take customer feedback very seriously and are looking to always do better. 

Meet Our Guest Speaker

Michele Ferrario

Co-Founder and Chief Executive Officer at StashAway

Michele has spent half his career in and around financial services and the other half on building consumer internet companies. He is currently building StashAway, with the goal of empowering people to build their wealth for the long-term. StashAway is an automated investment engine that helps people to better manage their savings in an intelligent, simple, transparent, and cost-effective way.

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