Zoe Financial, a New York startup that matches investors with thousands of carefully selected RIAs, has hired two new senior employees to help it manage another surge in clients, advisors, and revenue, and to create a roadmap for decades to come, CEO Andres Garcia-Amaya told RIA Intel.
Matzen, previously a vice president at Goldman Sachs Ayco Financial Management, became the new director of financial planning at Zoe in August, Garcia-Amaya said. Rajesh Gaur, the former vice president of investments and head of trading at RobustWealth, is Zoe’s new head of Investment Solutions and joined the firm in September.
The new hires joined as Zoe continued quickly growing its advisor network and revenue.
This year, despite its rigorous approval process that the company says denies roughly 95 percent of RIAs that apply, Zoe’s network has expanded to include more than 3,000 advisory firms, up from about 2,000 in 2020. Zoe also expects revenue will be up 300 percent compared to last year, Garcia-Amaya said.
Garcia-Amaya said “thousands” of investors visit the site each month to find an advisor and that the number of visitors is growing at a double-digit pace each month.
In May, Softbank Group lead a Series A round of funding for $10 million, and the company was valued at $48.31 million following the deal, according to Pitchbook, a data research firm. Garcia-Amaya declined to comment on the company’s current valuation.
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“That has just allowed us to really start to think much longer-term, right? Start thinking decades rather than quarters, in the sense of the people that we're hiring, the product roadmap, and how ambitious in essence we are now with a product roadmap versus 2021,” Garcia-Amaya said.
To be a part of the network, advisors must pass a multi-tiered process and filter system.
“At the top of the funnel, it's fairly simple, which is they can't have any client complaints, any SEC issues, or red flags,” Garcia-Amaya said. Advisors with any of these complaints or those who don’t pass the background check don’t even make it to talk with the company, he added.
From there, Zoe assesses if the RIAs are truly independent, and makes sure they are not affiliated with a broker-dealer in any way. Advisors must also have either the CFP or CFA designations, or an MBA in finance from a top-ranked university.
Next is an hour and a half due diligence call with Matzen, who determines if the advisor is doing robust financial planning for clients.
“A lot of firms say they do financial planning but then when you dig a little bit deeper, they really don't. Like, they asked three or four questions and they call [that] financial planning,” Garcia-Amaya said. “[Matzen] gets a sample of their financial plan and drills them on every aspect of their financial planning knowledge process, their investment knowledge process. We look at their investment piece, like what type of products are they using, and all of that basically goes into a score.”
If advisors don’t receive a passing score, Zoe gives them detailed feedback so they can apply again.
“The goal is just to raise the bar for all. So, we get a fair amount of advisors that tried two or three times each year,” Garcia-Amaya said. “It's not like we're shooting for only 10 percent to get in. We just hoped that a lot more advisors kind of raised their game so that they could match the expectations of clients deserve.”
When Zoe first started, it was a big deal if 50 advisors in one month applied to join its network, Garcia-Amaya said. Now, the company receives hundreds of applications every month.
Garcia-Amaya was doing the financial planning assessments himself — he’s interviewed more than 3000 advisors who have applied become a part of the network. With Matzen’s help, he’s hoping to further improve due diligence process. The search to fill Matzen’s position took almost two years.
“We wanted to really scale it out,” Garcia-Amaya said. “We're really starting to think in essence [of] how do we build a world-class team for each of the functions to allow us to scale to a much larger scale?”
With the hiring of Matzen and Rajesh, Garcia-Amaya said they were looking for someone who fit culturally, who believed in the mission of the company to help the consumer and empower them to make better decisions, and had the experience to understand the wealth management space and meet at the intersection of finance and technology.
As the company continues to grow, Garcia-Amaya said they are looking to fill other roles, such as a senior legal counsel, and continue to build solutions for advisors and consumers. The company announced the launch of an e-Sign product, so potential investors, once they are ready, can hire an advisor with one click on the platform.
Garcia-Amaya likened the process of hiring an advisor to that of buying a home. It requires a lot of meetings, a lot of questionnaires, and a lot of duplicate paperwork. The new tool simplifies the process and removes friction, making hiring an advisor much easier, he said.
The company also created a financial snapshot tool that investors use to see a visual representation of their entire financial picture and receive personalized insights as they go through the process of selecting and interviewing Zoe financial advisors.
Zoe Financial is free for investors. The company takes either a percentage of the fee advisors charge a client on assets under management, or Zoe will charge advisors a flat annual fee for five years if they charge clients a flat fee.
Holly Deaton (@HollyLDeaton) is a staff writer at RIA Intel and based in New York City.