International Finance
Fintech Magazine

Lifetime financial planning: What is the better trade off?

Singapore fintech startup BetterTradeOff’s solution solve the loss of human touch and contextualisation in financial planning for individuals

Behind the evolution of fintech startups and virtual banks across the world is the insight that customers, especially millennials, are increasingly frustrated that they are being sold to by their traditional banks instead of being provided contextualised and personalised financial savings solutions.

Ideally human beings need to be able to plan and save for important life events and goals such as higher education for self or their children, marriage, buying a house or retirement. Walk into a traditional bank and ask for a final solution for one of these goals and you are likely to be sold a product that is profitable for bank or the agent rather than the customer. How do customers understand that the financial services options that they are choosing are contextualised to their lives and goals?

To answer this question, Laurent Bertrand and Robert Lonsdorfer founded Singapore fintech startup BetterTradeOff on the belief that by leveraging technology they could offer individuals as well as financial institutions solutions that provide transparent and unbiased financial information to make better decisions about their future.

The fintech startup’s flexible, modular, white label SaaS solution Aardviser can quickly and efficiently capture the financial status of a new or existing client of a financial institution to help it engage the customer with relevant financial solutions to build trust in financial institution-client relationships.

In November 2019, the startup launched a direct to consumer solution Up which helps individuals develop their own financial plan online helping anyone, regardless of financial acumen, to explore and plan a better future. Based on the concept of holistic lifetime planning, the platform dramatically simplifies the financial planning process.

For advisors it provides a collaborative tool that allows them to give clients a meaningful and intuitive understanding of their current financial situation, while enabling the advisor to deliver a transparent and unbiased plan for achieving a client’s future goals and dreams.

The direct-to-consumer solution provides people with a do-it-yourself tool for exploring and understanding different financial choices and outcomes. Interactive, highly visual, and fun to use, ‘Up’ makes it easy for people to see and understand the impact of each decision they make, while exploring a wide range of financial situations, including family composition; life events (such purchasing a new home); expenses and income; savings and investments (including tax implications); education costs and financing; insurance and debt.

In an exclusive Interview with International Finance, the co-founder of BetterTradeOff Laurent Bertrand speaks about how the fintech startup’s twin solutions help individuals achieve holistic lifetime planning instead of piecemeal financial solutions that don’t serve the purpose. BetterTradeOff has raised over $3 million in its Series A, and is planning to instigate a Series A2 institutional fund raising of $10 million in the first half of 2020.

International Finance: How does BetterTradeOff’s product differ in the application of the concept of holistic lifetime planning compared to other financial planners? Among the many B2C financial planning solutions out there in the market, what is Up’s unique value proposition?

Laurent Bertrand: Up significantly differs from other platforms. Theplatform provides a comprehensive picture of all the elementsi mpacting a person’s financial plan, with real-time data, delivered in a way that’s interactive and visual, making it easy to see and understand the financial impact of every decision. This provides transparency and clarity with respect to a person’s financial needs, as well as the potential risks they face – helping them build a plan to both finance and protect their dreams. With all the elements at their fingertips, users can build a plan they can trust and find the peace-of-mind that comes with knowing they are covered. You can’t dream if you can’t sleep.

In addition, our solution has been designed to be easily deployed across jurisdictions (we typically open a new country in four to six months including incorporating all the relevant rules such as those involving taxes). This makes it easy and convenient to maintain our solution up-to-date with regulatory and economic changes, so large financial institutions can deploy our solution across their geographical footprint effectively.

How does the solution work?

It starts with a quick onboarding where we only capture the basics: age, household composition, housing, income, existing assets and retirement assumptions.

Having pre-populated your plan based on advanced statistics like salary evolution and living expenses and all the relevant rules like taxes, property and social security, we bring you immediately to your dashboard where you’ll see visualisations of your current financial situation – savings, net wealth and cashflow.

Rather than answering a hundred questions before getting any insight, you gradually increase the accuracy of your plan while acquiring an intuitive understanding of the financial impact.

This is where the fun starts – planning the future. You can select different financial goals, or dreams as what we call it in the tool – from retiring, buying a house, travel, sending kids to university, and so on – and simply drag and drop them into your plan. As you do, your financial situation is immediately updated, so you can see the impact of each selection.

This allows you to explore endless dreams and financial possibilities – ultimately – building the plan that’s right for you. The tool also allows you to simulate risk, such as visualising what would happen to the financial stability of your loved ones in case of your death, or should you face permanent disability – so that people can see the importance of incorporating the right level of protection, such as insurance, into their plan.

When you speak of financial advisors, what is the profile of the typical financial advisor that you are targeting?

Currently we partner with some of the world’s leading financial institutions, enabling their financial advisors to provide clients with a transparent and unbiased plan for achieving their life goals and dreams. Our B2B solution can be found in four countries: Singapore, the Philippines, the UAE and Switzerland.

Since BTO’s solution is available in Asia, the Middle East, and Europe, how does the solution ensure relevance across markets?

We use advanced analytics and statistics taken from every country of operation, to ensure that the life plan is not just comprehensive, but hyper-localised and market-relevant. We incorporate the relevant rules regarding family, taxes, property, social security, retirement, healthcare, insurance, investments to ensure that the results are reliable, and users can explore all their options.

In markets where people have not warmed up to algorithm driven financial planning how do you sell BTO’s value proposition?

There isn’t a single market where people don’t want to plan for a safer, better financial future. They might plan with Excel, on paper or with the help of a certified financial planner but in the end, in developing and developed markets alike, every one of us want to know how much is enough and how to achieve our goals and dreams.

BetterTradeOff takes care of the complexity for you and makes the process fast, intuitive, transparent and fun, helping you to feel confident in taking better decisions for your future. Armed with the knowledge of what you need to achieve your dreams, you can then easily use robo-advisors or traditional financials institutions like banks, insurances or brokers to trade or buy the financial products they need.

Can you quantify (if possible with numbers) the value financial advisoirs and their clients can derive by using your solution over a life time vs the traditional methods of financial planning?

Having deployed our solution in four countries with multiple leading banks and insurance providers in various setups, we have observed consistently the following key results

Effectiveness: investment size up to two times larger
Efficiency: up to 15 percent closure in the first meeting compare to the norm of three to four percent;
Acquisition: seven out of 10 surveyed clients recommend our solution
Activation for dormant and orphan clients

From the client’s side, what kind of data does the solution gather and what are the integrations required?

We collect only necessary data to build a reliable plan for the clients. They can see transparently how the information is impacting their financial future. They can input all their data manually or through secured API with data sources like bank accounts.

Uploading existing client data to avoid unnecessary re-entry is key in terms of change management. We naturally collect all activities happening on our platform for audit purpose as well as to support improved client experience through advanced analytics.

Our solution has been designed so our clients can gradually integrate with it from Single Sign-On for security to quotation engine and fulfilment.

To build momentum early-on, most of our clients start with light integration (upload of existing client data, existing financial products and white labelling) and gradually increase integration to generate further efficiency gains and seamless experience.

Which are your main markets today and which are your target markets? As far as your B2C solution Up is concerned what are BTO’s plans for markets outside Singapore?

The B2B platform is currently deployed in Singapore, the Philippines, the UAE and Switzerland. Discussions are already underway to add markets in Asia, the Middle East and Europe. Our direct-to-consumer tool – Up – was launched in Singapore last month (November 2019). We hope to launch in two new, to be determined, markets next year.

Rarely do fintech companies offer both B2B and B2C solutions. How do you plan to balance the demands of having both B2B and B2C offerings?

We are obsessed with making a difference for the end-client and that obsession applies to both our B2B and B2C solutions. What we observed very early on is that once end-clients are convinced about a financial decision, the next question becomes where to find the relevant financial products.

Our B2B and B2C solutions reinforce each other: we offer a broader distribution channel for financial institutions with our B2C platform while our B2B solutions can be used by professional advisors to provide the human touch so often required for life-decisions.

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