There are so many bad things about losing a parent. The emotional toll. The gut-wrenching yard sale of all their old things, only to then find that you (“Sorry, sir, could you please put that down?!) can’t actually part with their tzotchkes. And then there is the daunting prospect of figuring out financially complex accounts while you are–let’s face it–not your most together self.
The Silent Generation, known for its assiduous work ethic, is passing on, leaving their Gen X children, defined as those born between the mid 1960s and 1980, who made a name for themselves rejecting corporations and consumerism, with their hard-earned cash and homes. Gen X, notoriously, hasn’t saved enough for retirement and has expansive debt, but they are entering their prime earning years and now, potentially, inheriting their parents’ wealth.
David Snider, the former CFO of Compass, a real estate platform now valued at $4.4 billion, has an answer. He’s just raised $4 million in seed funding to launch Harness Wealth, a marketplace that connects people with financial advisors, estate lawyers, and tax professionals. Rather than fumbling around, still grieving, looking for word of mouth suggestions for what to do, Harness Wealth aims to hold your hand.
Individuals with between $250,000 and $10 million will be able to search through service providers on an à la carte basis or they can go through the site’s “impact plan” interactive questionnaire. The latter will offer recommendations matched to the prospective client’s needs.
Harness Wealth’s dashboard lets users monitor their financial activity–from retirement savings to investment accounts–across providers. The site launches today and those interested can put their name on a wait list for later access.
Snider wanted to bring wealth management into the digital age, while retaining the benefits of human advisors. He struck up relationships with a variety of small firms who were seeking new clients. In exchange for a minority percentage of the adviser’s standard fee for clients, Harness not only brings them new clients, but provides the technology for managing them. It’s this latter component that Snider believes will keep wealth management firms on Harness.
“Before we started Harness Wealth, we completed significant research on the biggest areas of concern and desired investment for advisers,” he says. Acquiring new clients was at the top of the list, but secondarily, these firms were looking to modernize and provide some of the digital conveniences that competitor startups were now using. His company gives them both, he says.
“Additionally, we are working with some of the most elite advisers in these verticals and don’t expect them to violate their agreements for modest short-term gain when we are adding long-term value to their practices,” he adds.
While digitally savvy millennials have been the center focus for many wealth management firms, a Deloitte report on the future of wealth notes that Gen X is undervalued piece of the market. “In fact, firms that haven’t yet woken up to Generation X’s potential may be too late to the party. As of 2015, about 37% of Gen Xers report having more than $100,000 in investable assets.” They also comprise the bulk of residential property investors.
For sure, wealth transfers from one generation to the next are a preoccupation of big firms like Morgan Stanley and UBS, which have taken great pains to be the-place-to-be for high-net-worth individuals. Harness Wealth is betting that some of those heirs might choose to take their parents money to them and their partner firms.