Facet Wealth’s growth in tech-enabled financial planning and the ‘metrics that matter’

Around fintech company Facet Wealth, the team has a saying.

“Every decision is a financial decision,” said COO Shruti Joshi, who recently joined the Baltimore-headquartered company, “and people need honest, expert, unbiased advice to make those decisions.”

During the pandemic, this has come to light for the company as it works to provide tech-enabled financial planning for a group that isn’t typically the focus of big financial advisory firms: individuals that have assets valued from $100,000 to $1 million, or more than $80,000 income.

It was among tech companies that was in place to meet the moment. In March 2020, the company had a service in place that offered remote advice from a certified financial planner.

But what the team found went beyond how it delivered services. It came down its approach. The pandemic was a chance to reconsider many aspects of life, from home to work to daily routines to hobbies. Facet Wealth, in turn, aims to take a more holistic approach.

“People have so many questions about life and money that go way beyond the standard industry focus on retirement and investments — and they simply have not had anyone they trust to turn to,” said Joshi, a former executive at Verizon and entrepreneur who was an early investor in the company. “The pandemic created a highly unique situation where people had more time to reflect on their lives, what makes them happy, and how they want to live. Their finances play a big part in that, and our focus on helping our clients live well across their entire financial life is perfectly aligned with that.”

It goes a long way toward explaining what is driving growth for the company. It quadrupled revenue in 2020, and momentum has continued this year, as it recently came off a month of growth with annual recurring revenue of $20 million.

How do you measure success? It's a question that can be especially tricky for those bringing new tools to established industries.

After tripling its workforce, Facet Wealth now has about 270 employees. It is hiring across the company, including in engineering roles building technology that makes the service run and supplements the advice users receive from the team’s human financial planners. The company’s technology is designed to help clients track and analyze their financial lives and wellness, providing a place to communicate with planners, reference advice and reduce administrative tasks that planners have to complete. In particular, the company is focusing on growing the “client experience” team to build features requested by users.

Looking ahead to another upcoming mark of growth, the company is considering a question many startups ask: How do you measure success? It’s one that can be especially tricky for those bringing new tools to established industries.

Facet Wealth is approaching $1 billion in assets under management, or AUM, according to Joshi. It’s a key measure in financial circles, showing the market value of all assets a firm manages for its clients. Theoretically, more money means more success.

But to Facet Wealth’s team, it’s the “wrong metric,” Joshi said, because it’s “advisor-centric.” In practice, it is used by advisory firms to set fees. And it has the effect of creating an exclusionary standard in the industry, she said, where “you must have investable assets in order to get advice.”

Facet Wealth, by contrast, doesn’t charge its clients a percentage of AUM. Rather, it charges a flat fee based on a client’s needs. With its model, the company is seeking to center clients, and what it can help them achieve, Joshi said. So going forward, it will look at different kinds of metrics as it seeks to mark progress.

“We think it’s more important to look at how we’ve been a part of our clients improving their lives,” Joshi said. “How much debt have they paid off? How many of them are enjoying a comfortable retirement? How many of their children will graduate from college without student loan debt? How have they improved the insurance coverage that protects their families? Those are the metrics that matter.”