Managing Your Wealth Smart With Invstr, The App That Levels Wall Street With Main Street

Financial sustainability is at least as big a threat to civilization as environmental sustainability is to the planet.

That’s according to Kerim Derhalli, CEO at Invstr, an app helping users overcome barriers to financial wellness.

“What we’ve been doing, as a society, is borrowing and spending, rather than saving and investing,” Derhalli said. “We’re basically stealing from our children and grandchildren.”

Derhalli spoke with Benzinga on reversing that trend with Invstr.

About Invstr: Founded in 2013, Invstr is a fintech specializing in commission-free investing and banking. The company is a pioneer, helping its users build wealth through tech-enabled financial awareness and access initiatives.

“Our mission is to help people build their confidence, knowledge, and wealth,” said Derhalli, a Wall Street veteran who held senior roles at Deutsche Bank AG DB and JPMorgan Chase & Co JPM. “At the end of the day, we want to be the only platform people ever need to manage their money.”

Prior to founding Invstr, Derhalli ran through a survey of nearly 4,000 millennials, discovering that while most were up for the challenge of investing, they lacked the confidence and knowledge to start.

With the rise of fintech and cryptocurrencies, a reaction to the failure of capital markets during the financial crisis, people became more sensitized to the markets. As a result, Derhalli said he founded Invstr as a holistic tool to learn and access markets.

“We are probably the No. 1 global financial education platform where we’ve had over 1 million downloads in 226 countries,” Derhalli said in a discussion on Invstr’s three-tiered education platform.

The first leg of the education platform is called Fantasy Finance, a portfolio management game that teaches people the basics of investing and generating a return on capital, over time.

The second leg is a social network, taking advantage of themes that suggest investors tend to trust themselves and their embedded networks like TikTok, YouTube and Twitter.

The third leg, Invstr Academy, is comprised of easy-to-consume online lessons.

“We give people the opportunity to learn from each other in a very social sense, exposing them to all the fun, excitement, and risk of the market without taking the actual risks because it is fake money.”

Invstr's Differentiator: When users are ready to put their real capital to work, they can open a commission-free, fractional brokerage account.

“In doing so, you get a full bank account with checking, savings, debit cards, and all the other features,” Derhalli said of his firm's offering. “Instant peer-to-peer payments and a crypto account are included too, all in a single package.”

Accounts are protected with Department of Defense technology, making it one of the most convenient and secure gateways to financial wellness, accessible across the globe.

“In parallel with all of that, we have Stats, a product which basically gives users feedback on their journey.”

In excelling in any activity, one must practice and measure quantitatively their fitness level. Invstr does so for its users’ accounts, analyzing their behavior, personality type, and interests, among other things.

“We built a factor model,” the CEO said of Invstr’s proprietary portfolio analytics and optimization tools. “We look at both your portfolio and behavioral attributes so we can give you a lot of insight into what kind of investor you are.

“We’re helping Main Street close that information, knowledge, and skills gap.”

Recent Developments At Invstr: In light of an impressive rise in retail trading volume, single stock volatility rocketed.

“Typically in financial markets, events, news, and differences to expectations are the things that create volatility,” Derhalli said. Today, “it is a lack of information where people are making uninformed decisions and pushing things, exacerbating moves that aren’t really justifiable.”

In protecting from the negatives of volatility, Invstr is committed to helping users learn and identify their style, as well as screen for and efficiently act on opportunities, he said. 

“We also have a tool called Portfolio Builder which, from three questions, instantaneously calculates a personal portfolio of 10 to 20 different instruments and we show you the allocation that you should make to each of those investments.”

Also displayed are the 12-month back-tested returns, Sharpe ratio and drawdown statistics.

“We hold your hand in a way that no one does if you want.”

Invstr's Innovation Outlook: For years, retail market participants were under the impression that Wall Street maintained a significant edge over Main Street.

Derhalli said this belief is nonsense and Wall Street is an economic tax on the economy that has been destroying value.

“If you look at studies that have been done in terms of asset managers, they add no alpha. In fact, they underperform the markets year in and year out by the amount they charge.”

In helping Main Street get past preconceived notions and barriers, Invstr is looking to become the top mobile and desktop platform on which users can spend, save, and invest money on globally.

“We’re building what we call a suggestions engine — a portfolio optimizer — and we’re going to be rolling out something called WealthBuilder, which is going to be our version of robo-advice,” Derhalli said. 

To learn more about Invstr, click here.