Facet Wealth CEO Anders Jones
When considering where to start the technology-driven financial planning firm Facet Wealth, Anders Jones and his co-founders evaluated potential cities across the U.S. with a sharp list of criteria. They needed: innovation, a ready pool of top talent, a supportive ecosystem and access to capital that would enable their growth.
“When you think about a thriving tech community, [these] are a few things that you need,” he said. “Baltimore really rose to the top.”
The company launched in Baltimore in 2016 with a couple of desks at Johns Hopkins University’s FastForward accelerator. Today, Facet Wealth has 240 employees in 33 states, and clients across the country.
“It was really refreshing moving here, to see how the community has really embraced investing in and creating a tech hub,” he said. “I’m excited to be here for the long run.”
Filling a gap
Facet Wealth responds to a gap in the market: clients with assets under $1 million, whose accounts aren’t profitable under the legacy, high-cost model of traditional financial advice. The company makes personalized services affordable to this group by charging an annual fee determined by the level of service needed. Facet Wealth pairs its clients with a certified financial planner who works with them directly, and facilitates the advisor’s work through sophisticated artificial intelligence, which reduces the time needed for preparation and follow-up support.
Jeff Stein, managing director at New York-based investment firm Warburg Pincus, a lead backer of Facet Wealth, describes the start-up as “a category-defining company that is well-positioned to disrupt the wealth management industry for years to come.”
Facet Wealth was already growing rapidly when COVID-19 decimated parts of the U.S. economy, forced widespread unemployment and shuttered countless businesses. Positioned to meet a vital need, the company quadrupled its client roster over the course of the year — growing from 1,500 to 6,000 clients — and Jones predicted they’d do it again in 2021.
Its strength was not just that it provides services virtually. The pandemic revealed weaknesses in the financial system and raised questions for many families about their financial wellbeing. “The market’s going crazy, people are stuck at home. What better service to have access to … than virtual financial planning?” Jones said.
Building on a long-time strength
In September, Facet announced $25 million in Series B funding, bringing the total investment it had raised from Warburg Pincus, Slow Ventures and others to over $62 million.
“Facet [is] democratizing financial planning, the way that Schwab democratized investing,” commented Chip Roame, managing partner of Tiberun Strategy to the online journal RIABiz.
“In five years, my guess is that Facet may [be] a large standalone public company on the way to becoming the next Schwab.”
The financial services industry has always been a strength of Baltimore, birthplace of Alex.Brown and T. Rowe Price and host to major banking operations. So it is not a surprise that fintech’s future would also take shape here.
As Facet Wealth navigates its exponential growth, Jones is optimistic about the city.
“It absolutely is possible to build a generational company in Baltimore, and we’re excited for the long-term prospects of the ecosystem here,” he said.