The pandemic drove a renewed interest in personal finance and how people managed their finances. It’s also led to a wave of innovation in the wealth management industry. The industry is also seeing a new generation of investors ushering in expectations that differ from older investors that have long relied on the legacy management model. The transfer of assets from boomers to the next generation will only accelerate this trend. Farther is a tech-enabled wealth management firm that is built to address the needs of today’s savvy, next-generation clients. The company blends cutting-edge automation with the comfort of working with skilled and dedicated advisors in addition to access to vetted experts that include financial planners, estate attorneys, CPAs, and insurance specialists. The company has quadrupled its assets under management (AUM) to $250M in the past year and has scaled to a team of 50+ as it looks to disrupt the $38T industry.
AlleyWatch caught up with Farther Cofounders Taylor Matthews and Brad Genser to learn more about the business, the company’s strategic plans, latest round of funding, and much, much more…
Who were your investors and how much did you raise?
Farther raised $15M in a Series A funding round – which was oversubscribed. The round was led by Bessemer Venture Partners and included Khosla Ventures and MassMutual Ventures as new investors. They join existing investors, Moneta Venture Capital, Context Ventures, and Cota Capital.
This funding round brings the total amount raised since Farther’s founding in 2019 to $22M and boosts our valuation to $50M.
Tell us about the product or service that Farther offers.
Farther is a new kind of financial institution that combines expert advisors and advanced technology to deliver a comprehensive and personalized client experience.
Our company has developed a custom tech platform, offering clients a holistic view of their financial life in one, centralized location. Farther’s technology also reduces the amount of time its advisors spend on administrative tasks, so they can spend more time with their clients and grow their business. Farther advisors are employed directly by Farther and use the cutting-edge platform as a central hub.
What inspired the start of Farther?
Farther was born out of frustration with the state of the wealth management industry, which doesn’t work for many advisors and provides a subpar experience for most clients. Traditional firms were using antiquated, bolted-together technology solutions; and advisors were spending a substantial amount of their time on low-value work or administrative tasks.
Although there’s been a proliferation of various wealth products on the market, in our estimation, technology was not keeping pace with the complexity of significant wealth. When we looked at the kinds of technology that advisors were turning to, we hadn’t seen nearly the same kinds of innovation as the products themselves. That struck us as an opportunity.
In Brad’s time at Goldman Sachs, he utilized data to understand when people had a demand for wealth management services. The software was so successful that Goldman executives assigned him a team of quants and strategists to build out the program across the wealth management practice.
We realized that this kind of sophisticated software is something we should bring to a broader audience.
How is Farther different?
Farther is the first to offer both the guidance of an experienced advisor and an elegant, easy-to-use platform — for a truly comprehensive approach to managing significant wealth. That blend of human expertise and advanced technology is what sets Farther apart.
Farther’s technology enables us to offer clients unique features that no other firm can match.
For example, clients work with their advisor to build customized and goal-based plans, which includes Farther’s “cash waterfall” feature that automatically allocates excess savings in a tailored, tax-efficient manner toward specific goals.
Our technology also frees advisors from low-value operations work. As a result, advisors spend 90% of their time meeting with clients and prospecting, compared to only 33% at traditional firms; advisors are able to build a 3x bigger book; and advisors’ pay can be more than 50% higher than what they would earn at a traditional institution.
Farther’s Alternatives Marketplace also offers qualified clients the ability to view and compare more than 100 private equity and hedge funds – which are not available on public markets. And when ready to invest, all they need to do is contact their advisor. Most traditional wealth managers do not allow clients to view their alternative investments in a marketplace format. Farther is revolutionizing the way in which this asset class is introduced by allowing clients to browse a full menu of current offerings.
What market does Farther target and how big is it?
Farther caters to a rising class of modern, high-net-worth professionals, who are building generational wealth and need a more holistic approach to managing their money. We recognize that our clients want to invest their wealth intelligently, so they can enjoy more of it today — and their children can still enjoy it in 50 years. This understanding is the backbone of our business strategy. As time passes, generational differences grow deeper in how people choose to invest their money, but Farther is developing a new approach to wealth management: one that is tailored to fit each client’s personal financial needs, while embedding a long-term strategy to create intergenerational prosperity, not just personal wealth.
What’s your business model?
Our business model is rooted in our efforts to have our innovative tech stack interpret every variable of a client’s financial picture and goals — and also all possible financial products — and then identify the optimal course of action in a predictive fashion to help clients reach those goals. The ultimate goal, or objective function, for a client is not just about making a plan and checking it quarterly: it is using data to cause action — i.e., controlling transitions, including whether to move into or out of a given investment strategy.
How are you preparing for a potential recession or economic slowdown?
The data is certainly a mixed bag. There is strong consumer spending, even with historic inflation. There is strong job growth, yet falling GDP.
From an investment perspective, I like to remember the old adage: investing isn’t about timing the market, it’s about time in the market. Missing even a few of the best days of a market recovery can severely impact your returns over time. While it can feel painful, pullbacks like this offer the opportunity to rebalance portfolios, which can improve returns over time. We are proactively arming all of our advisors with strategies to address clients’ shifting needs amid such an uncertain economic environment.
What was the funding process like?
Our Series A funding round is the latest proof point of Farther’s rapid growth trajectory since our founding in 2019. The Series A funding, which included numerous productive conversations with a diversity of VCs, will help to facilitate Farther’s continued growth and innovation in the wealth management space.
The news of our successful funding round is especially significant given the recent plunge in startup funding. As reported by the New York Times, investments in U.S. tech startups dropped 23% over the last three months, the steepest fall since 2019. Farther’s rapid growth reinforces the significance of our new hybrid approach to wealth management — one which combines expert advisors and cutting-edge technology to deliver a comprehensive, personalized client experience.
What are the biggest challenges that you faced while raising capital?
Many have struggled to understand our platform and put their full trust in data solutions. We recognize that complex industries — such as wealth management — require human education, advice, and judgment. To address these concerns, Farther combines the latest technology with the critical human touch of an advisor.
Even in 2022, all new and innovative companies will be met with some degree of doubt over the efficacy and relevance of their services. As the world continues to evolve, consumers’ needs will continue to grow and expand; however, there will always be a universal need for companies that make our lives simpler and easier, combining advanced technology with human intelligence.
Many have struggled to understand our platform and put their full trust in data solutions. We recognize that complex industries — such as wealth management — require human education, advice, and judgment. To address these concerns, Farther combines the latest technology with the critical human touch of an advisor.
Even in 2022, all new and innovative companies will be met with some degree of doubt over the efficacy and relevance of their services. As the world continues to evolve, consumers’ needs will continue to grow and expand; however, there will always be a universal need for companies that make our lives simpler and easier, combining advanced technology with human intelligence.
What factors about your business led your investors to write the check?
Our investors see that we are revolutionizing the traditional wealth management space. For too long, the wealth management sector relied on legacy models, limiting advisors’ ability to spend time with their clients and grow their businesses. Our investors are excited about the way Farther is pairing powerful technology with premier advisors to enable new and more personalized solutions to this antiquated model.
What are the milestones you plan to achieve in the next six months?
We’re excited to continue on our rapid growth trajectory and strengthen our foothold in the world of wealth management.
Farther’s rapid growth and successful Series A round are also enabling robust new partnerships on a consistent basis. We look forward to continuing on this path of success and adding to our corporate partners, as well as our team of seasoned professionals.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
We would recommend examining how well your company is blending technology and human expertise.
Firms should look for every opportunity to combine what was great about traditional practices with cutting-edge technology. Technology not only drives efficiency, but also leads to more flexibility and greater access.
Where do you see the company going now over the near term?
We’re excited to continue on our rapid growth trajectory and strengthen our foothold in the world of wealth management. In the first half of 2022 alone, Farther nearly quadrupled its assets under management to over $250 million and doubled its staff size to over 50 employees across the country, including advisors, engineers, and product personnel.
What’s your favorite outdoor dining restaurant in NYC?
The original Shake Shack in Madison Square Park.
