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06.23

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Bringing Financial Advice to the $500 Investor

According to envestnet’s Dani Fava, to be able to bring really valuable profes-
there’s simply never been a better time sionally managed account services to
for advisor-industry innovators. The clients with as little as $500. It’s really
opportunities they have to elevate the about democratizing access to advisory
profession and the outcomes of clients services. That is a lofty goal and really
are “nothing short of astounding,” she provides us with a sense of personal pur-
said recently at the firm’s 2023 elevate pose and motivation.
Conference in Denver, when she spoke When envestnet was founded, I
with Investment Advisor. believe their separately managed
account minimum was like $800,000.
InvestMent AdvIsor: Can you tell To be working on a solution to bring that
us more about the work of the product same level of intellectual capability all
innovation group that you oversee? the way down to somebody who has
dAnI FAvA: The first thing I will tell you just $500 to invest — that’s honestly a
is that my team specializes in a really source of personal fulfillment.
unique form of market validation, and
that’s what we are working really hard Can you tell our readers about the sub-
on right now with the embedded finance ject of your keynote presentation here
capabilities. An integral part of our firm from outside of financial services, at the conference? Is it about tiktok
innovation process is to go out and do and, internally, we just thought this was trends and financial advice?
really strong qualitative market validation the coolest idea and that advisors were Yes, it’s a light and fun presentation, but
research. It’s all about a central question: going to love our idea. I think it has an important message with
Are we identifying and solving a true Well, we went out and tested it, and respect to consumer behavior.
problem that advisors are facing, one that we discovered that there were just The basic approach is that I’ll be
needs to be solved to allow them to do some reasons why an advisor would not playing four different TikTok videos to
business more efficiently and effectively? engage with such a solution. It may be display key trends on the platform, and
It’s interesting work because there is a disappointing when that kind of thing I’ll be likening these trends back to key
tendency in the financial services space happens, but it is by doing this validation facts about consumer behavior and how
in general to have a lot of assumptions work first that we are able to save time this impacts financial services delivery,
about how the industry works and what and resources overall for the company. especially with respect to next-genera-
clients’ needs are. But when you do this tion clients.
kind of validation work, you often find As you lead the product innovation Stepping back, something I would
that you had a lot of things right, but you group’s many efforts, how do you say to your readers is that they can-
didn’t understand everything. keep it all straight? not underestimate the impact of what I
One of the most valuable testing tools It’s the overall vision that you have to get will call “finfluencers.” People in Gen Z,
we have is doing anonymous survey right. The most important thing is that in particular, obtain so much of their
research, because another thing that you have a vision of the ecosystem you information from social media, and that
many firms get wrong is to ask their cur- want to create. Yes, there may be a lot includes information about investing and
rent clients about the usefulness of their going on, but it’s all in search of a clearly finance. It’s a real risk for firms to just
services or technology. You often do not defined end goal. completely ignore this fact and assume
get a truly honest response. We recently I can distill it down to one example they don’t have any need to be exploring
had a situation in which we were testing for you. Within the embedded finance platforms like TikTok or other forms of
out a new integration with a big-name solution, one of our motivating goals is social media. — John Manganaro
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June 2023 Investment AdvIsor 1