Digital advisor SigFig is looking to expand its footprint beyond big banks, and it’s hoping an unorthodox new hire will help lead the way.
The fintech startup, which powers the robo advice platforms at big banks such as WellsFargo, UBS and Citizens Bank, has hired Michael Korcuska as chief product officer. Korcuska most recently served as chief product officer at Weight Watchers, where he was responsible for the popular weight loss brand’s websites and apps.
Korcuska, once an executive in residence at venture capital firm Greylock Partners and a six-year veteran of LinkedIn, is tasked with helping the company expand its footprint into smaller markets.
The newest SigFig executive says his outsider status could be an advantage.
“I find that product folks with specific direct experience overweight their own personal views about how things should happen, or don’t do a good job of listening in an unbiased way,” Korcuska says. “The thing I hope to bring from Weight Watchers is a reminder that no matter how good your algorithms are, you have to consider the human aspect of things.”
SigFig co-founder and CEO Mike Sha recognizes a traditional hire would have more direct experience with SigFig’s business. Beyond powering consumer-facing digital advice for three massive financial institutions, SigFig
But the reality is there aren’t many people who are world experts in both technology and finance, Sha says. His strategy is to get different experts together and collaborate.
“It’s all about domain knowledge. If you look at our board, [SigFig has] great people in fintech, investors and folks who understand the governance and compliance and policy side,” Sha says. “The area we want to add knowledge is advisor distribution, sales and engagement.”
SigFig
But the market has been difficult for business-to-business, says David Goldstone, a research analyst for Backend Benchmarking. SigFig has large bank contracts, but its most recent deal,
Sha says he sees growth potential in bringing SigFig’s technology down-market to mid-sized banks and large independent broker-dealers and RIAs. The startup, which has attracted nearly $120 million in funding from venture capital firms and financial institutions, has historically prioritized large banks to reach scale, not because the technology couldn’t work for other segments, Sha says.
“The basic notion that advisors should use more technology is true with almost every segment of the market — wirehouse, RIA or insurance. I don’t know many parts of the industry that are using optimal technology to modernize their offering,” Sha said.
While there is opportunity for digital advice in large- to mid-sized firms, the independent advisor market could be challenging for SigFig, Goldstone says. Without the built-in pool of customers from a consumer bank, it’s harder for RIAs and IBDs to achieve the kind of scale necessary for the robo advice business to be profitable.
“Looking at it from the RIA perspective, [robo advice] is difficult and it doesn’t always make sense,” he says. “Advisors need to figure out how to fit it into their practice.”
There is work needed to adapt SigFig for smaller firms. While large banks want (and can afford) a product tailored to their infrastructure, RIAs need something easier to use out-of-the-box and with integrations to connect other technology.
So why is someone who hasn’t previously worked with advisory firms the right person for the job?
Sha notes parallels between Weight Watchers and wealth management. Physical fitness and financial wellness both rely on data and research, and both must contend with human behavior and emotion. Like poor eating habits, neglecting personal finances doesn’t immediately lead to short-term pain. However, long-term implications can be devastating, Sha says.
And both are industries trying to balance being more online while not neglecting the importance of human interaction.
“We work with a lot of banks with significant non-digital experiences,” Sha says. “We help them innovate by bringing digital and non-digital together.”
Parametric CEO Brian Langstraat is also joining SigFig’s board. Based in Seattle, Langstraat takes the place of Eaton Vance CEO Thomas Faust, who decided to cut down on his travel from Boston to SigFig’s headquarters in San Francisco. Eaton Vance owns Parametric and is an investor in SigFig.
Langstraat expects to use his experience growing Parametric into a $300 billion AUM firm to help SigFig increase market traction.
“The Parametric and SigFig operating models are similar — we’re providing an investment management service that is predicated on efficient operations and technology and connection through the advisory market,” Langstraat says.
