Looking to challenge the rise of platforms automating financial advice, fintech startup Investfit has launched today with $1.5 million in Series A funding, offering a cloud-based platform that uses an algorithm to predict a user’s financial future.
Aimed at financial planners and advisers, the platform takes a client’s financial profile and investment goals to crunch out a predictive outcome of what their financial path looks like and identify the best investment strategies to reach them.
Through the algorithm, advisers using the platform are able to save the substantial portion of time taken to calculate a client’s financial outcome, which traditionally involves working through bundles of spreadsheets.
With advisory firms a key focus, the startup has brought on mortgage firm Mortgage Choice Financial Planning (MCFP) as the first dealer group within Australian to licence its platform for use. The technology was also piloted for over a year through NSW-based advisory firm Priority Advisory Group.
Investfit’s development is has been backed by global venture capital (VC) firm Sapien Ventures, who led the $1.5 million Series A.
Speaking about the announcement, Investfit’s cofounder Ed de Salis said the platform solves a fundamental issue with robo-advisement tools, which look to automate investment at a low cost rather than offering guidance for manual investment.
“While automation in the industry is reducing costs and digital tools such as robo-advisers can invest our money cheaply online or generate an SoA, automation itself doesn’t materially benefit the client, whereas better quality advice does,” said de Salis.
“A client is more likely to have a positive experience with their adviser if they can be more confident of leading a better lifestyle after the advice.”
Mortgage Choice Financial Planning CEO John Flavel reinforced this idea, describing the technology as the “holy grail of tools” for advisors.
“Key to a profitable advice practice is lowering the cost of client acquisition and advice delivery, and Investfit achieves that in spades. Ultimately it’s about delivering high-quality advice and we can now complete the client fact-find to reporting process in a fraction of the time,” he said.
The startup emphasised that aside from the mortgage industry, the technology will hold a strong presence in helping users manage their retirement plan, an area that De Salis said a number of Australians struggle with.
“Many Australians will run out of money early in their retirement. Because they have the wrong strategy in place – super or non-super – they will leave money on the table and run out of funds much earlier,” said De Salis.
“Investfit solves this problem through technology that helps advisers and their clients make better informed decisions along the way. For those who don’t currently use an adviser, Investfit can show the very real benefits of getting advice.”
Looking to a low-cost, online alternative for financial advice, the fintech market has seen ‘robo-advice’ become a growing trend, with startups such as ProAdvisor emerging last year to help the average millennial understand how to invest their money through an algorithm that gives them recommendations.
Others go the extra step and help users invest their money, with Stockspot, for example, providing an automated investment service.
Following its Australian launch, Investfit plans to build a strong local client base before focusing on international markets, having already onboarded local Asian financial services company BMY Group as a customer in addition to MCFP.
Image: James Claridge, Gavin Daw & Ed de Salis. Source: Supplied.
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