A new wealth management startup called Prumentum Group is coming to market with a unique value proposition, looking to combine the technology chops of a roboadvisor with the human touch of a registered investment advisor. To do so, the company has built a tech platform, raised $25 million in funding, and acquired a minority stake in a financial advisory firm.
Over the last 18 months, the team behind Prumentum has been working on a dual-track strategy to provide a mix of technology and human advice that it hopes will be able to serve a larger portion of users than other financial advisory companies.
On the one hand, the company has been working on a tech platform called BrightPlan, which is set to compete with the likes of Wealthfront and Betterment in the robo-advisory game. That platform was built by a team comprised of former employees from Silicon Valley firms like Salesforce and Cisco.
Meanwhile, Prumentum acquired a minority stake in Plancorp, a registered investment advisory firm that already has $3.6 billion in assets under management. Serving high net worth individuals, families and institutions, Plancorp has decades of experience helping a diverse range of clients reach their financial goals.
According to Prumentum co-founder and CEO Marthin, the company has taken an initial 40 percent stake in Plancorp, with the option to purchase up to 100 percent of the company through an equity exchange later.
With both pieces in place, the company believes its tech platform will enable Plancorp to help many more wealth management clients than it previously would have been able to serve. At the same time, working with an established advisory firm will allow Brightplan to go beyond just rebalancing and optimizing investment accounts through technology and offer a deeper level of financial advice to its users.
“We’re taking the financial planning methodology Plancorp has been using for decades… now we can bring it to anyone regardless of their net worth,” De Beer told me by phone.
Prumentum was founded by De Beer, a former Cisco exec who had run the company’s video and collaboration business, along with serial entrepreneur Robert Wallace.
Together they self-funded the company before raising the cash it used to take their stake in Plancorp. But when it came time to raise its Series A, the company turned to family offices like The Cynosure Group and Fremont Group instead of raising from more traditional venture capital firms.
“We’ve been very fortunate in pulling together a unique set of investors that represent some of America’s most successful entrepreneurial families,” De Beer said.
He also noted that the investment horizon of family offices were more aligned with the type of business he was hoping to build, as opposed to VCs that would expect some sort of liquidity event in a decade or less.
While Prumentum is coming to market with a hybrid strategy, it’s not the only startup to determine that wealth management customers increasingly are looking for a mix of technology and human financial advice.
Earlier this year Betterment announced that it would begin making financial advisors available to its users as a complement to its robo-advisory service. Meanwhile SoFi, which got its start in lending, launched a wealth management service that combines low-fee individual and retirement accounts with personalized advice from non-commissioned, licensed financial advisors.