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Is M1 Finance Set To Take On Charles Schwab? – Bambu Digest #14

Key takeaways

✅  Is M1 Finance Set To Take On Charles Schwab?

Our first article today says that the M1 investing platform wants to be the next generation’s Charles Schwab & Co, only better.  M1 has over $3 Billion in assets under management and has empowered over 500,000 investors to open accounts and improve their financial well-being. They offer investing, digital checking, and portfolio lines of credit. And, M1 just raised $75 million in venture capital after a spectacular spike in growth. According to M1 CEO and Founder Brian Barnes, now M1 is focused on going after traditional banks. Barnes doesn’t want people to manage with the traditional banks. M1 offers edgy, mobile-tech branding.

According to Barnes, M1 is focused on improving client finances as opposed to offering financial entertainment. He says that “Wealth is built through long-term ownership, not gambling on short-term price movements”. M1 grew client assets from $800 million in January of 2020 to nearly $4 billion by year’s end. If the company stays on track, it will hit $10 billion in assets by the end of 2021. But staying on track means tripling their monthly asset haul. According to researcher David Goldstone at Backend Benchmarking, M1 may very well struggle to maintain its growth rate. Goldstone says, “It is easier to grow from 100,000 users to 500,000 users than to grow from one million users to five million users.” But M1’s top executives say they see no evidence of hitting a plateau anytime soon.

✅ Who Is Helping WeLab Move Into The WealthTech Space?

Our next article today zeroes in on WeLab, the Hong Kong Fintech founded in 2013. Since it began, WeLab has raised more than $600 million dollars of strategic financing. They were the first in Hong Kong to secure a digital banking license. And their offerings include a range of solutions from online consumer credit platforms to virtual banking. WeLab claims to have almost 50 million individual users and over 600 enterprise customers. And now the company intends to enter the digital wealth management and insurance markets.

WeLab has announced a working alliance with Munich-based Allianz Global Investors. Allianz led a $75 million dollar funding round for the Hong Kong company, saying that WeLab presents an exciting opportunity for the Allianz growth strategy in Asia. Desmond Ng is head of Asia Pacific at Allianz Global Investors. He says that Asia is home to some of the most dynamic wealth management and banking markets in the world. Ng says that Hong Kong, specifically, has the second-highest rate of bank deposits per capita in the world. And that makes it a very attractive wealth management market. According to WeLab CEO Simon Loong, they will be adding 100 new staff members to help scale the company as they enter these new markets.

✅ What Edge Is Offered By The New Riskalyze Tool?

Finally today we cover Riskalyze and their new “Build My Tech Stack” tool. Riskalyze is a SaaS-based fintech that offers a platform for analyzing investment risk. They currently serve tens of thousands of financial advisors and hope that this new tool will expand their reach even further. The new proprietary tool offers a step-by-step guide to help advisors quickly design fintech integrations. The goal is to save advisors hours of searching through the thousands of fintech solutions available. This process for many companies results in what Riskalyze calls a “FinTech Frankenstein”.

In other words, advisors are spending hours stitching together solutions that don’t always integrate or deliver as expected. But the new Riskalyze tool helps advisors to narrow down their selections. Then it generates a personalized report that includes step-by-step instructions and an overview of everything the integration requires and performs. Riskalyze says that they are keenly aware of advisor pain points regarding technology. And the “Build My Tech Stack” solution offers advisors more time to focus on advising, and less time frustrated with tech integrations.

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