Chicken before the egg – where are all the financial literacy start-ups?

As a lay investor myself, who happens to be building a wealth management business for the everyday Joe and Jane Bloggs, I find the customer journey from awareness to purchasing a true example of a chicken and egg problem. How do you get someone to purchase something they intrinsically don’t understand, or don’t even know they need?

My observation is that the fintech wealth space is good at building chickens, but not so good at laying eggs. These ‘chicken’ businesses are built by financial experts, who, being active investors already, spot an opportunity to do something better with technology, and forge ahead. But when they wonder why they can’t scale beyond an early group of adopters, the truth of the matter is they have failed to understand the fact that no one really gets the fundamentals of wealth, and therefore will blank out to a product they perceive as either too high-brow, risky or down-right confusing.

This is basic top of the funnel stuff, that you almost need to have experienced yourself to understand how to empathise with and address. Perhaps the greatest irony of all is that the new breed of wealth businesses may be best built by non-financial experts. After all, they represent the vast majority of the market, and can easily leverage and tap into financial expertise along the product development journey. The point is, they come at the problem the way it needs to be solved, with a fresh and reframed approach.

Perhaps the smartest fintech wealth play is to consider tackling the chicken and egg problem concurrently. And by that I don’t mean whacking up a blog on your website and explaining what an ETF is, I mean a deep cross over between edutech and fintech. Given the cost of delivering education is dropping by the day thanks to a plethora of online delivery platforms, all you need is great educators/communicators to create content. The next level of smarts is in delivering that education element packaged inside a transaction clipping wealth product. The gamification opportunities within this are obvious.

Three platforms I spotted in my travels when penning today’s piece, that are scratching at the edge of a fintech/edutech tie up are Goldbean, LearnLux and Napkin Finance. But most Google searches around this topic throw a blank. If someone can truly nail this, then there is a global opportunity just waiting to be nabbed.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business.

 

 

 

 

 

 

 

One comment

  1. Great observation! This is a topic dearest to my heart!
    Wealth, especially asset management, industry lacks trust, partly because there have been no fundamental rational approaches. Until we can measure the advice we give and make it portable, it is difficult to educate!
    Making wealthTech rational & transferable like knowledge is a prerequisite to education. I think we are slowly going in that direction! Again, great insight!

    Like

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