New Venture Seeks to Make FinTech Socially Responsible

Financial Finesse Ventures seeks to erase the trend of predatory practices and close the financial literacy gap.



Financial Finesse, an independent provider of financial wellness coaching as an employer-paid benefit, has announced the launch of Financial Finesse Ventures—a venture arm for socially responsible FinTech.

Financial Finesse seeks to bridge the financial literacy gap by delivering unbiased, life-changing financial coaching to millions of Americans. The goal of Financial Finesse Ventures is to support a new era of FinTech that is strictly aligned with the best interests of consumers, the company said in a press release. The new venture arm, company-backed and led by Liz Davidson, Financial Finesse founder and CEO, will seek investments in purpose-driven companies dedicated to driving positive social impact.

The explosion in FinTech has led to an escalation in services that place profit above purpose—with a recent surge in companies selling high-interest-rate loans, encouraging irresponsible investing, or connecting investors with overly expensive financial products and services in exchange for high commissions. This trend is not only concerning for consumers who could fall for these predatory practices, but also business leaders who worry about problematic service offerings being embedded into employee-facing platforms.

Financial Finesse Ventures seeks to change the trajectory of the industry, support companies that both consumers and employers can trust, and inspire other firms to begin investing in innovation for good, the release states.

In an interview with PLANADVISER, Davidson says that Financial Finesse Ventures will work directly with employers to reach adults in the U.S.—however, she adds this is a trend that the industry has been moving towards as customer acquisition costs have continued to rise. Establishing relationships directly with plan sponsors, recordkeepers and advisers and being installed in their platforms is easier than reaching consumers at scale.

But with so many retirement firms and different technologies in the market, the challenge has been how to vet them and ensure they can be a trusted partner, Davidson says.

“We know that there is absolutely a need for many of these point solutions,” Davidson says. “But how do we know who’s going to be in business? How do we know that this company is operating in a way that is transparent, is pro-consumer, is socially responsible that our brand is not going to be compromised by partnering with the wrong firm?”

Financial Finesse Ventures reviews a combination of factors when choosing companies, Davidson says. For the social responsibility part, the team is looking at if the firm is not overcharging, providing fee transparency and has smooth internal operations. For the social impact part, she says Financial Finesse Ventures looks at firm’s technologies to determine if they could be transformative to consumers, putting money back in their wallet that they could use to pay down debt, invest or increase their financial security.

“Our business model has always been B2B, [where] the employee pays nothing. We’re not selling any products or services. It’s very mission-based,” Davidson says. “We have a very good sense of what works in this space in terms of having a business model that was set up to be in the employee’s best interest and by extension, the [best interests of the] employer or the recordkeeper.”

Financial Finesse Ventures announced in the release that it has identified a number of early-stage companies with pro-consumer models and will announce its first investment this quarter. Beyond funding, Financial Finesse Ventures will help incubate its portfolio companies, leveraging Financial Finesse’s relationships and expertise.

“While there is increased discussion about social responsibility and some encouraging macro trends in the ESG space, FinTech is significantly lagging in these areas,” Davidson says. “We are at a critical crossroads—what we do now as investors, employers, and consumers has the potential to change the trajectory of the industry. With Americans facing significant financial challenges, there is a lot hanging in the balance. FinTech has the potential to be a powerful solution; we want to do our part to make sure it is.”

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