When she isn’t chilling out to songs of Bristol-based singer songwriter Rothwell, Melanie Palmer, CMO at Exo Investing takes a critical view of the term ‘robo-advice’ and talks us through how their team of data scientists uses data and AI to create tailored investment decisions for individuals.
You can meet Exo Investing as part of the FinTech Stories stream at FinTECHTalents Generation 2019 this November.
What is Exo Investing– what problem are you solving?
Exo leverages the latest technology to automate and personalise wealth management, making it accessible to everyone, both through our technology and our own investment platform.
We partner with wealth managers, adviser networks, banks and other institutional clients to streamline end-to-end journeys across back / middle / front office functions. Our technology is modular, API-based and fully customisable, creating a simple way to integrate with existing infrastructures. We accommodate models ranging from end-to-end white labelling, to co-branded partnerships, to custom integrations.
In May 2018 we launched our own investment platform, the first of its kind as a fully AI-powered wealth manager. Every client’s portfolio is completely unique, built around their goals, and managed daily for a fixed, low-cost fee. With Exo, clients can choose how much control they want over their portfolio, deciding between a customised, themed or fully automated approach. Before reaching a year old, Exo Investing was named Best Digital Wealth Manager and Most Innovative Product of the Year at the 2018 AltFi Awards.
The problem we solve is that wealth management businesses are coming under immense pressure due to decreasing fees, increasing regulation and the need to digitise their service offerings.
With a tech-first approach we can help businesses to future-proof themselves by significantly reducing overheads and increasing the capacity for client acquisition and servicing (without the need for huge internal transformation projects or building a digital wealth management service from scratch!).
What is the problem with Robo-Advice?
‘Robo-advice’ is a widely misused term, which unfortunately can end up confusing customers or painting an inaccurate perception of what these platforms do. Robo advice implies that all of the investment decisions are automated and that the machine provides financial advice, which for a lot of “robo-advisors” is not the case.
The second issue we find is that it tends to cause a lot of businesses to be classified under the same term, despite significant differences in the proposition offering. For instance, at Exo, we do offer purely quantitative portfolio management. Our team is made up of data scientists, not investment managers and by using data and AI we can make the optimal investment decision for every person, for every portfolio, every trading day, whereas other players still rely on a human decision-making element. This is a huge difference which is almost skirted over by the catch-all of ‘robo-advice’.
Another key difference is that at Exo, every single client’s portfolio is created on an individual basis and managed individually as well. This means every decision Exo makes is based on you and your situation, not the average of a group. Again, this a very different approach than what the ‘robos’ do, who tend to rely on model portfolios.
Thirdly, I think it ignores a large part of the capabilities that are offered beyond portfolio management. For instance, we’ve managed to automate the entire process of wealth management from onboarding through to regulatory reporting. This is so far beyond being just a ‘robo-advisor’ and the implications are far-reaching for both the retail and institutional space.
Overall as a term it has very easily entered the media and industry vernacular, in fact I can’t count the number of ‘robo’ conferences that exist now, but given that the ‘cool’ nature of fintech hinges on trust and transparency, I think it’s hugely important that we use words that are representative of the services that are being offered.
Who uses your service? What is the average portfolio size for your own clients?
Exo for business has been built for wealth managers, adviser networks, banks (both retail and private) and other institutional clients (both within and outside of the wealth sector), allowing them to streamline end-to-end journeys across back / middle / front office functions.
Exo Investing, our award-winning platform was originally built for sophisticated investors, however our mission is to bring our technology to as many people as possible so we are working on some exciting developments which would make it even more accessible. Watch this space.
Do you have any performance metrics you can share?
While we don’t publish any direct performance metrics as every client’s portfolio is completely unique, we were delighted to be awarded Digital Wealth Manager of the Year and Most Innovative Product of the Year at the 2018 AltFi Awards. Which was a huge validation of what we’re building, especially given that we’ve been live for less than a year.
What advice would you give new entrants in this space? What’s your ‘startup advice’?
It’s busy, come on in! I think no matter who you’re working for, we are all trying to do the same thing and that’s to give more people the tools and services they need to reach their financial goals.
So, my advice to anyone would be stay true to that. Be honest and stay humble, money is a fundamental part of every single person’s life and we still have such a long way to go to help people get there.
My other piece of advice is network! I feel extremely privileged to work in such an inclusive and collaborative industry and company. There are awesome events going on all the time with so many people in attendance who are willing to help, share stories or introduce you to your next big partnership, so get involved!
We have an array of craft beers and independent music at FinTECHTalents – Give us a great song to listen to while we sip your favourite tipple
Rothwell – Freedom