Michael Gerber, CEO of 360F, a Fintech firm that offers automated financial advice, has been focused on expanding the company’s operations into the MENA region.
Gerber previously worked as the Managing Partner and CEO of a globally active management consultancy company. His professional career began as a technical project manager with Living Systems. He has also worked as a consultant with the Boston Consulting Group (Switzerland) in the area of Financial Services.
During his consulting career, Gerber focused mainly on wealth management and life insurance. He has experience working in the areas of customer orientation, process optimization and various platform projects. Gerber has led and participated in more than 100 projects during the past 20 years.
We recently caught up with Gerber to learn more about the products and services that 360F aims to offer. Our discussion is below.
Crowdfund Insider: Why do many consumers not trust financial advisors?
Michael Gerber: In 2016, I founded 360F to address the quality of financial advice. If you present the same financial profile to three advisors, I can guarantee you, unfortunately, that you would get three starkly different recommendations. Clearly, the lack of consistency and verifiability has lead to the consumer’s distrust of financial advisors.
Agents fail to ask their customers what they want, and what they really need. They don’t really delve into what is important for their clients. There’s a perception that financial planners are biased in their advice, motivated only by commissions. While there is some truth to that, the quality of financial advice typically corresponds with the agent’s experience, along with their knowledge of a clients’ true needs and biases. We are helping to overcome the bias by using software to challenge the client to think about what they really want and needs, profile those needs, and then put everything together.
We know that consumers are sensitive about the effectiveness of their insurance and investment products, however, they lack the financial knowledge to make the best decisions for themselves, and there remains a massive protection gap globally. Our goal is to help consumers to understand their financial needs and where they need to build protection.
Crowdfund Insider What’s in it for the end user?
Michael Gerber: Financial advisory services are only relevant when the client is aware that he may have a significant problem and has the ability to understand the cause. A financial planner cannot take for granted that their customer has a reasonable baseline level of financial literacy.
One product that 360F has developed is the 360-NeedsProfiler. It helps a customer self-identify their financial needs when they input data by answering eight basic questions: birth date, gender, whether you smoke, how many people are financially dependent on you, your gross monthly income, how much do you spend every month, what type of sports you do regularly, and what kind of lifestyle you want for yourself.
For most of the questions, there is a choice of suggested answers to simplify the process and protect their privacy. The options for the income and expenditure questions, for example, are in ranges so that you do not have to reveal the exact figures and there are only three possible answers for the desired lifestyle question: “frugal”, “stress-free” and “only the best.”
With each additional answer provided, the 360-NeedsProfiler refines its calculations based on actuarial and other data to display visually the relevance and event risk related to the specific financial needs are to them. Armed with this self-discovery, a customer can decide what needs they want to discuss with a financial planner. 360F helps guide them to make smarter financial decisions, because it gives both parties a better context for that conversation.
A level up, the 360-ProVestment program deep dives into the users’ financial aspirations and circumstances. To make product recommendations, the program cycles through up to 40 million simulations of what could happen to you, and tests different permutations and combinations of products to see how close you come to achieving the stated goals. The best thing is that this process takes only seconds.
Say, if a woman wants to retire in 2040, it looks at all of the likelihoods that could happen between now and 2040, and assess the risk that she may need experience disability or a critical illness based on her profile, and then it assesses how that will affect the cash flow of the various products.
The scenarios 360-ProVestment creates are not hypothetical but are based on customer-specific probability distributions of investment and insurance risks. The scenarios are also multi-dimensional, at the same time they take into account many different risks, such as the probability of a market crash and the probability of critical illness.
Furthermore, 360-ProVestment makes recommendations tailored to the laws of each jurisdiction and the rules of each insurance company or bank that is deploying it, so that non-compliant products are filtered out.
The consumer can select alternative insurance policies or investment funds to see how making changes to the products they invest in could affect the fulfilment of their goals. While the program gives you the best options, we still want people to be able to check that for themselves. In this sense, 360-ProVestment earns the consumers’ trust. They can see how the products suggested suit them personally and will help meet their needs.
Crowdfund Insider: How do you plan to disrupt the Fintech space?
Michael Gerber: We help all consumers, who may be using such services for the first time ever, to self-verify the advice quality, hence giving them the confidence to trust the financial planner. Our solutions derive far richer data from their leads. This means that the financial planner can offer better or more personalized, holistic product recommendations.
If we are disrupting, it is because we are bringing customer-centricity to a new level. For the customer, we are helping them self-define their financial resilience and freedom, in a measured way and with consistent reliability, as we make it easy for them to evaluate the insurance and investment advice they are being given.
Crowdfund Insider: Why have you decided to expand your operations into the Middle East?
Michael Gerber: Unlike key financial centers like Singapore, Hong Kong, London, and New York, banks and insurers in the Middle East are still undergoing digital transformation. We help banks and insurers in the Middle East, and equip their financial advisors, to sell more comprehensive product portfolios online.
Our solutions address local regulations and factor impending regulatory requirements, such as BOD-49, to make hyper-personalized product recommendations based on the rules of each insurance company or bank that is deploying it. That is how non-compliant products are filtered out.
Crowdfund Insider: What is your vision for 360F?
Michael Gerber: Our vision is to give customers their financial foresight and consequently create a win-win for advisors, institutions and customers. We are aiming to revolutionize financial planning with predictive and optimization capabilities, to gear customers for the maximum possible financial resilience and self-defined financial freedom.