3 Robo-Advisors CEOs Explain How They're Trying To Make Investing Easier

The concept of robo-advisors isn’t new.

Despite the growth of the industry over the last five or so years making it easier to invest than ever, a large segment of the population continues to be underinvested — especially young adults.

The leaders of three top robo-advisors outlined how they’re trying to change that in a discussion at the 2018 Benzinga Global Fintech Awards. 

M1 Finances: A Free Investing Platform

Most of M1 Finance's customers are clustered in their late 20s to early 40s, which CEO Brian Barnes attributes to the fact that the platform is 100-percent free.

“That does attract a lot of customers with lower account balances,” he said, noting that M1 sees two-thirds of its activity through its app.

M1 is focused on getting people to invest as much as their income safely allows and considers being out of the market the worst-case scenario, the CEO said.

“You see pretty bad behavior when people have no knowledge of what they own and why they own it," Barnes said.

"What’s going to determine someone’s success in life is not whether they overperform or outperform, it’s whether they put 80 percent of their investable assets in the markets or 20 percent."

SigFig CEO: 'Simplify, Simplify, Simplify'

SigFig has focused heavily on working with existing financial institutions to improve their existing technology and make life for financial advisors easier, said CEO Mike Sha.

“The media likes to put this idea out that the robo-advisors are out to put the traditional advisors out of business. We see something completely different with most of our advisors,” he said.

Investment advisors are using the tools and technology available to them and spending the time they save working with clients, the CEO said.

“For self-directed folks, they might go on an Interactive Brokers to get every last product. But most of us are kind of buy-and-hold and invest for the future so we can retire. And I think for those folks, the name of the game is gonna be simplify, simplify, simplify.”

Younger Workers Face Retirement Risk, Says Swell Investing CEO

Swell Investing CEO Dave Fanger's goal is to teach younger generations that numerous asset classes are available that they can potentially invest in — especially with an unclear future for social safety nets like Social Security. 

“Really it’s about getting younger generations to see that,” Fanger said. “The real concern is you’re facing a generation in Generation Y and Generation Z who will reach retirement and have shortfall risk. And that’s what we don’t want to happen.”

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The Complete List Of The 2018 Benzinga Global Fintech Award Winners

Moderator Theresa Carey, left, with SigFig CEO Mike Sha, M1 Finance CEO Brian Barnes and Swell Investing CEO Dave Fanger at the 2018 Benzinga Global Fintech Awards in New York City. Photo by Mandar Parab.