Monday, November 16, 2015

Money Show 2015 - FinTech

I went to the FinTech investing Symposium. I am interested in this as I believe that the financial world is going to go through big changes in the future. The Host was Adam Najee, head of Financial Technology, MaRS Discovery District.

Mars FinTech is the 6th largest in the world as a FinTech hub. London's FinTech hub has 600 startups, New York has around 500 startups and Toronto has around 100 startups.

I have notes on the first two items in this Symposium. One is around Crowdfunding in real estate and the other is about Robo Advisers for financial planning.

Hitesh Rathod, CEO Nexus Crowd Inc.

Canada has the Nexus Crowd for crowd funding. A minimum investment is $10.000. This is for crowdfunding in Real Estate.

There is donation and rewards based crowdfunding. There is securities based crowdfunding (of equity or debt). There is global crowdfunding of securities and real estate. Real Estate crowd fund is $2.6B and growing. This is because of the high rate of return in the 15% to 25% range. There is a higher margin for commercial Real Estate than for residential Real Estate. These sorts of investments have not been available to individuals in the past.

There is 175 Real Estate crowdfundings in the US. In Canada there is only Nexus Crowdfunding. It is registered in Ontario. Private funding does not have to do regular quarterly reporting. The platform you invest in must provide financial reporting. Nexus has deals that are already 50% funded. They try for investments that are no longer than 5 years.

Algorithmic Investing: Meet the Bright Minds Behind the Revolution
Moderator: Pat Bolland, Former Co-Host, Sun News Network
Panel: Randy Cass, Founder, Nest Wealth, Mike Katchen, CEO, Wealth Simple

Cass: Nest Wealth uses Robo Advising. Tech removes emotional investing. It is sophisticated investing at low cost. It involves both tech and humans.

Katchen: Wealth Simple is Robo Advising. The company has an easy dashboard. It is built for young investors. They provide good services at good cost. Canada has some of the highest fees in the world.

Cass: Nest Wealth is looking at older wealthier clients.

Katchen: Wealth Simple is looking for younger clients. Clients with $10,000 and they will grow with their customers.

Cass: Nest Wealth uses iShares and cheap ETFs picked by asset classes.

Katchen: Wealth Simple also uses asset allocations. For this company you can sign up via a mobile app.

Cass: Nest Wealth uses banks to hold securities. They are considered to be fund managers and must invest in the best interest of clients.

Katchen: Wealth Simple uses algorithms to get best return based on risk level of investor. They use algorithms for investing and handling tax losses.

Cass: With Nest Wealth, 10 questions over 5 minutes and best practices will get you a portfolio.

Katchen: Wealth Simple does not do short term investing. If, for example, an investor wants to invest for 3 years, they will tell them to go to a bank and get a GIC. Wealth Simple is connected to Power Financial. Power Financial has a minority stake in Wealth Simple. They have 3,000 clients and are growing at 10% per week after 1 year in business.

Cass: Nest Wealth will not disclose client information. They have 500 advisors in the US and 12 in Canada. They started later in Canada. Banks are slow to change because they are making too much money the way things are now.

Katchen: Wealth Simple's algorithm was built internally.

Cass: Nest Wealth uses other people's algorithms. Active management Mutual Funds are expensive. Most of the Bank's Mutual Funds are like ETFs. Nest Wealth would like to eliminate Mutual Funds with fees over 2%.

Katchen: Wealth Simple does rebalancing and not whole sale changes. Clients cannot change their risk profile easily.

Cass: Nest Wealth feels that timing the market does not work. They never try to predict the market. Clients can change risk profile, but would need to have a conversation with an advisor.

Katchen: Wealth Simple does threshold and annual rebalancing.

Cass: Nest Wealth feels that there are massive changes coming to Financial Planning. People will get low financial management fees.

On my other blog I am today writing about CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF) ... learn more...

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