Wealthtech Y TREE aims to deliver this with its three pillars; transparency, efficiency and meaning.
Utilising data, technology and expert advice, Y TREE gives its clients access to techniques and solutions usually reserved for a select few. Having started to take on clients in late 2018, the business now has £7bn ($8.5bn) of assets on its platform and works with more than 500 individuals.
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PBI: Let’s go through the timeline of Y TREE from idea to now. What was the gap in the market that you saw and how does Y TREE fill that?
Stuart Cash, CEO and co-founder of Y TREE: From the beginning, it has been a personal mission for the three founders.
At the time, I was at Goldman Sachs where I was working with major UK companies on asset liability management (ALM) of pension funds. ALM means the assets that sit in a pension trust and the liabilities are the stream of cash flows that you need to pay to satisfy people’s pension.
With this model, companies were paying their employees’ salary for the rest of their lives and so that is the liability and the assets of the trust. As I was at Goldman working with some large corporates on how to solve that problem, I realised that a lot of people do not know enough about their own personal pension.
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By GlobalDataI also realised that most people do not have a pension anymore because the defined benefit has gone and so people have got whatever they have saved.
What Y TREE is doing is bringing data, technology and human experience together to give people this vision as to how they can think about managing their money and their life.
Arik Peretz, Co-founder, Tech & Product at Y TREE, spent his time in software development in a number of FinTech businesses, so he brought the technology and the digital product expertise. Johnnie Hampel, Co-founder, Client Relationships, is our third Musketeer and brought with him an understanding of the ultra-high net worth space having spent the last 20 years advising family offices.
We have combined Johnnie’s understanding of people and high net worth investments, Arik’s understanding of technology and the product scalability and my own asset liability perspective to create something truly unique.
There are three things that I think need to be addressed when it comes to personal finance. One is transparency – having a deep understanding of all your money and assets. The second is efficiency – understanding the costs and making sure that you are getting good value out of the money. And the third is meaning – that’s really understanding what your money does for you and society.
How would you provide the three pillars? Let’s start with transparency.
We aggregate people’s financial affairs using our bespoke technology. We do this by sitting on top of the wealth management industry pulling together people’s investment accounts, current accounts, properties and private assets, which enables us to bring everything into one interface. It’s not an easy thing to do and it requires a lot of technology.
How do you provide the efficiency then?
It is a range – for some it is about helping clients to source products more efficiently. For others, it is about taking advantage of tax allowances or how to best invest your cash. All of this is about giving the client the right kind of risk profile across everything that they own. There are efficiencies that any institutional investor would use that our clients wouldn’t necessarily do because they are often time poor.
How do you extract meaning from money for your clients?
It always starts with a conversation around purpose – which is very personal. We like to ask our clients, where do you want your money to go? How is it going to be spent on your family? What problems in society do you want to help to solve? Then we can start modelling and managing risk to ensure our clients’ money is working for them.
You could think of us like a Skyscanner – we’re not selling hotels or airline tickets but we are sitting on top of the wealth management industry giving our clients transparency, efficiency and meaning.
We give them a bird’s eye view of what’s going on across all of their financial profile, from their house to their investments to their business. This enables them to have a good perspective on how to run their money.
We see the industry as being able to provide the products to our clients. We are not competing with the likes of private banks or wealth and asset managers. They provide the product to our clients; we make sure that product fits into the overall equation.
