Hybrid digital wealth management provider Facet Wealth announced it has secured $33 million in funding, in a Series A round led by private equity firm Warburg Pincus. Joining the PE firm is Slow Ventures, a venture capital firm specializing in early- and seed-stage technology firms, signaling investor optimism for the growth plans of the wealthtech company that started serving clients just 18 months ago. The company is also a finalist in this year’s WealthManagement.com awards.
The funding will be used to fuel Facet Wealth’s expansion strategy of purchasing small client relationships from existing financial advisors, said Facet Wealth CEO Anders Jones. The firm focuses on partnering with registered investment advisory firms to bring on board smaller clients with between $100,000 and $1 million in assets. Those clients are often unprofitable for a financial planning firm to serve. The funding will also be used to improve the client experience through increased efficiencies.
“We’re really excited to be partnering with [Warburg Pincus],” added Jones. “They’re very much a thesis-driven investor and they kind of have this vision of what the future of wealth management looked like and it matched almost perfectly with ours.”
“There’s a big market opportunity ahead of us,” Jones said.
Facet Wealth’s push to provide the mass affluent with financial planning, leading with a technology interface but backed by tried-and-true CFPs, looks to be a winning combination, according to Jeff Stein, managing director at Warburg Pincus. Warburg Pincus, with $45 billion in PE assets under management, purchased a Spanish online wealth management provider, Self Trade Bank, earlier this summer and has made investments in European banking software. “We look forward to leveraging our deep expertise in the financial services sector to support … the entire Facet team, as they define the next generation of financial life management for the mass affluent,” he added.
While this round of funding will be used for acquiring new clients and providing an improved client experience, in the next 2 years Facet Wealth may be aiming to bring in “downstream” clients with an even smaller amount of investable assets. “The current industry is set up very nicely to service clients with more than a million dollars,” Jones explained. “That’s not really as blue ocean as how can we take the exact same set of services and offer them to someone with $50,000.”
