Financial advisory is something that might not be sexiest topic in the market, but as we try to navigate complicated financial structures, it is an essential industry. However, therein lies the concern as financial consultants are often seen as salespeople or in some cases, conmen. There is a fundamental lack of trust in the industry.
We had to chance to speak to Michael Gerber, Founder and CEO of 360F, an insurtech that is aiming to bring back consumer trust in financial advisory. Its flagship innovation is a computer-intensive advice autopilot that gives everyone their own insurance and investment recommendation, anywhere, anytime and that is self-evidently the best for them.
The startups’s products reduce the reliance on manual solutioning, analysing more quickly than a human can and, based on an individual’s preferences, goals, and financial needs, can almost instantly determine what products and their configurations are the best fit for your comprehensive financial wellbeing.
We speak to the Prajit Nanu, the CEO and Co-Founder of Nium to learn more about his journey.
We wanted to speak to Michael about the overall industry and how he believes he can bring trust back into the industry. Find out what he had to share below.
How does 360F plan to dispel a lack of trust in the market, especially with decades worth of misconception in the market?
A big misconception about financial advisors is that they are salespeople; it creates a lack of trust in the financial advisor. Additionally, the business of financial advisory is transacted in a highly traditional manner, which technology can address to bring credible progression to close perennial issues by addressing both the protection and retirement gaps, which will help earn back the trust of consumers.
360F has created a team of actuaries, quantitative finance experts, data scientists, computational engineers and industry veterans to bring insights into, and to help automate parts of the financial advisory sales process. The result is software tools that enable financial advisors to deliver holistic, self-evidently apt financial investment recommendations.
Can you explain how the automation works?
360F uses an award winning algorithm based on behavioural science to analyse publicly available actuarial data to instantly determine, based on an individual’s preferences, goals, and financial needs, what investment or protection products are the most suitable to meet a specific individual’s needs.
360F has three products that utilize these sophisticated algorithms. First is 360-ProVestment, the world’s first recommendation optimizer for investment and insurance to automate hyper-personalized and robust solutioning.
360-ProVestment activates up to 40 million simulation scenarios to stress test and craft the insurance and investment portfolio that is best suitable and most valued by the customer. Second is 360-NeedsProfiler, a highly interactive engagement tool based on actuarial rigor to help your leads discover and become aware of their financial needs. And lastly, 360-Compare, a comparison engine for investment and insurance products that even simulates the impact on customer’s financial wellness.
360F introduced the metric, ‘financial happiness’, which is a simulated measure of one’s self-defined financial resilience and aspirations
What are some of the challenges you expect to face as you scale the business?
As with all fintech start-ups, our biggest challenge is to find the right balance between very fast growth and capital consumption, with a laser focus to make the business sustainable.
What are some of the major changes you have seen in the industry in 2020?
The market has seen material structural faults in 2020; Covid-19 triggered the market to be flooded with money, the interest rates are record-down, a new remote-working behaviour has been stablished, a major uncertainty for planning continues. Only few players have really adapted to the new future where clients are much more self-reliant in shopping, learning and working. Covid-19 was the biggest “educational” exercise in history to push the clients to become independent.
What’s next for 360F?
360F will be a turn-key player to provide technology not only for banks, insurers but also for new-players like utility companies or telcos to sell financial services. 360F plans to build Financial Advisory 4.0.