As part of a regular series powered by Dell Small Business, BetaKit asked business leaders to share their experience starting a business, and how their solution is disrupting an industry.
Planswell is an online platform that helps users build a financial plan in less than five minutes. In the last year and a half, the company has created over 150,000 financial plans for Canadians, proving that financial plans aren’t just reserved for the wealthy.
BetaKit sat down with Planswell CEO Eric Arnold to discuss the importance of financial planning for everyone, and why a company like Planswell couldn’t have existed 10 years ago.
Financial planning is not just for the wealthy
Today, if you search “Financial Plan” on Google, you’ll find a list of blogs trying to define the term and independent financial planners trying to sell you their services. You won’t find the big banks on the first page of results because, presumably, if you have to search “Financial Plan” on Google, you’re not wealthy enough to have one.
Arnold disagrees. Most people (wealthy or not) “don’t know what to do on a monthly basis to maintain their lifestyle in the future,” he explained. After working as an investment advisor for several years at a big bank, Arnold learned about the many pitfalls of the financial industry. For one, big banks are slow to integrate technology into their processes, especially for investment portfolios, making it difficult to service more than a few people at a time. Arnold also remembers being told not to serve people with less than $500,000.
Good financial planning has traditionally been offered to the very wealthy – through big banks or independent advisors. Planners and clients find each other through old-school schmoozing, and the whole process, Arnold said, is inefficient and only services a small group of people. It’s advancements in technology, especially in machine learning, that would make Arnold’s vision a reality.
“How can I change the lives of a lot of people?” Arnold thought. What if, instead of taking a month to service one client, he could engage multiple people through the internet? What if the entire process could be automated?
Waiting for the right time
In 2012, when the idea for Planswell first started to materialize, “FinTech” wasn’t yet a term that people commonly used. “People thought no one would put their financial information online,” Arnold said.
Those people were right. Because data security wasn’t talked about like it is today, Arnold said it was really hard to convince people to support his idea back in 2012. He spent a few years starting other businesses to keep the lights on. It wasn’t until 2015 that Arnold, who’s now responsible for user experience at Planswell, started building his team. In 2016, things really started to move quickly following the company’s first round of funding.
Having started several businesses in the past, Arnold said Planswell has been the most exciting but also the most challenging. None of the other businesses required the implementation of emerging technology that’s changing the landscape today. Planswell was also the first one that required money from outside investors. Arnold had to make sure that he hired the right people. Planswell now employs over 50 people, including his co-founder, Scott Wetton, whose responsibility it is to ensure the right mix of technology is driving the business forward.
The Canadian company uses the power of AI and automated technology to help users build an actionable financial plan. After a user lands on the platform, they’re directed to a questionnaire of about 36 questions that takes less than five minutes to complete. The system then does more than 40 million calculations to produce a plan that helps users achieve their goals. The finished product is a free financial plan that users can implement over a free call with a Planswell advisor.
Arnold acknowledged that “advisors bring a lot of intuition to the table.” But, Planswell isn’t getting rid of that intuition; it’s just using predictive technology to offer it to more people.
Arnold said that Planswell now gets regular referrals and is swamped with organic traffic. The company is running tests in 17 countries and hopes to expand outside of Canada this year. When asked if he thinks that big banks will eventually produce their own version of online financial plans to compete with Planswell, Arnold said it’s unlikely.
“The industry is busy acquiring companies or building them internally through incubators or hiring entrepreneurs. What we’re doing is building a movement,” Arnold said. “And it can’t be recreated at a big bank. Planswell is completely devoted to changing the industry to help you maintain your lifestyle.”