Retiree robo shuns app, still lands $8M funding

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A fintech startup with no mobile app does a fundraising round. It secures $8 million. How is that even possible?

True Link, a retiree-focused hybrid advice platform, had a simple pitch to investors: elderly clients like the convenience of digital advice, but want to talk on the phone. The firm claims it received 1.6 million client calls last year.

“We want our customers to call us, understand the product and what we’re doing,” says True Link CEO Kai Stinchcombe.

In addition to offering on-call financial advice for an annual 87 basis point fee, True Link also provides clients a prepaid debit card for $10 a month, which can be customized to limit spending and even block specific transactions.

As proof of the potential of elderly-focused wealth management offerings, Stinchcombe cites AARP statistics: Americans over 50 accounted for $116.8 billion of revenue in the traditional banking industry. Increasingly, they are funding their own retirements as public and private pensions dwindle. “The world changed while this generation was in the workforce,” says Stinchcombe.

QED Investors, which has also invested in 401(k) automated advice provider blooom, led the San Francisco-based startup’s Series A round. With the addition of last week's funding round, True Link has now raised nearly $16 million since launching in 2012. It does not publicly disclose the number of clients it has, assets under management or revenues earned from its card, Stinchcombe says.

“During our first round, we often heard, ‘Why are you going after such a niche market, why don’t you get into the mainstream and target millennials?” Stinchcombe says. “We’re not hearing that question as much anymore.”

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True Link is one of a number of startup digital advice platforms aiming to bring retirement-age Americans onto a platform that specializes in drawdown strategies. RetireUpPro and United Income recently released similar services.

But it’s the only advice platform with a card offering. True Link initially launched with its pre-paid card offering, provided by Saint Paul, Minn.-based Sunrise Banks, and only began offering wealth management in 2015.

“We thought banking was the more compelling place to start,” Stinchcombe says. “In retirement, checking and investment accounts become more closely linked, like the deep end and shallow end of the swimming pool, the money flows from one into the other.”

One guideline to remember is that retirees should continue being invested in stocks, which produce high returns and pay dividends.
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As a lifeline, True Link provides algorithm-driven spending monitoring, Stinchcombe says, in addition to spending controls that a guardian or family member can set. For its wealth management service, the firm takes into account a health profile and sources of income, and uses that to decide the right mix of funds to preserve wealth. A direct-to-consumer and an advisor offering are available.

Stinchcombe acknowledges True Link’s wealth management offering is more expensive than offerings from Schwab and Vanguard, but says it is comparable to other elderly-focused platforms, along with hybrid advice sites like Personal Capital.

“There is a huge trend to being disruptive with low pricing, but the flip side is people are expecting more for what they do pay for,” he says.

The firm recently added additional customer support in upstate New York, Stinchcombe says, and will build out a mobile app in the future, though the website can be viewed by phone.

Still, on-the-go finance has its drawbacks as a concept, he argues. “If you’re checking your investments on the subway, you’re probably doing it wrong."

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