Photo: Personal Capital
When it comes to the old age of wealth management services, Bill Harris says it’s high-time we ditched the shoebox. He’s talking about the way financial firms used to ask clients to dig up months’ worth of financial statements, pile them into an old box and lug them down to their office.
The papers would get pushed and punched into spreadsheets, take days to analyse and require clients to trek back for another meeting to receive their financial diagnosis.
Those days are gone.
In September, Harris launched Personal Capital, an online wealth management service aimed at bringing consumers to the forefront of their own finances and shifting the needs of advisors to the back burner.
“If you look at financial services today, most are product-focused and not consumer-focused,” says Harris, former CEO of PayPal and Intuit. “But from a customer’s point of view, they don’t care about that. We try to reverse the paradigm and put the customer in the middle and surround the customer with all their accounts.”
Much like other online finance sites, Personal Capital offers a Mint.com-like dashboard where anyone can track and manage their accounts for free.
But it’s the company’s so-called “friction free” approach to asset management where Harris and his team have pulled ahead of the pack.
Personal Capital gives clients complete Web access to its 10-person team of advisors via online messaging, email, video chat and phone.
“Increasingly, people don’t want to drive down to a branch to do their banking. They’d like to do it on the Web or phone,” Harris says. “And because it allows us to reduce the cost of delivering this kind of customised service (in person), we can lower our fees versus traditional providers and also make a profit at the same time.”
The company is also known for highly detailed web charts outfitted with a holistic view of clients’ finances – all money going in and all money going out, global asset allocation, investment dissections, etc.
For its wealth management service, Personal Capital targets households with complex finances – the most ideal audience for customised financial education, because they lack the same cushion for financial risk as millionaires, Harris says.
Once they’re set up with an advisor, clients have access to a range of services, including help managing their investments, optimising their cash assets and dealing with debt.
They also have 24/7 access to their portfolio online and can contact their advisor throughout the week, from 6 a.m. to 6 p.m. PT. They can also opt-in to receive emails as frequently or infrequently as they like with a bird’s eye view of their finances at that time.
No, it’s not face-to-face interaction, but Harris maintains that because there is so much emphasis placed on transparent communication, there’s a greater sense of intimacy to the advisor-client relationship.
In the end, it’s about piecing together what has become an increasingly fragmented industry over time, he says.
“The technologies (traditional financial firms) are operating with are in most cases very old, often three or four decades old, so they have a very hard time changing,” he added. “In a way, we have an unfair competitive advantage because we’re starting from scratch.”
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