Can you please tell us about your professional background? What motivated you to co-found Nalo?
Hi Phil, thank you for having me. After a Master’s degree in physics, I worked for 10 years in financial markets in London and Paris, building investment products for institutional clients. I loved my job, worked long hours, and had no time to take care of my accumulating personal savings. The available solutions didn’t work for me. Wealth management services were too expensive, and doing it myself was too complicated and time-consuming. Something simple, that would just run on its own with little input from me, was what I was after. Since my job was to build financial models, I ended up building my own tools to manage my wealth.
While in the US a few years ago, I discovered what was happening in the fintech and robo-advisor landscape. It was an epiphany: I had been looking for this for 10 years, yet had never thought my homemade tools could be a business! After two sleepless nights, my next career back in Europe was obvious.
How is Nalo different from other robo-advisors, and what factors made you focus on life insurance rather than other investment products?
In France, the historical way of investing is through life insurance tax wrappers. In many ways, these products work like classic brokerage accounts with mutual funds and ETFs. They also have fiscal advantages and are quite flexible. With currently over €1,600bn in life insurance products in France, the decision was easy to start here.
Traditional offerings, as well as other robo-advisors in France, limit themselves to a handful of standardised investor profiles (such as a static risk scale of 1 to 10). Hence, there is no real tailoring of investments to an individual, since people with completely different situations and goals are bunched up in these simplistic groups.
Nalo has reinvented the use of these wrappers. We have pushed the logic of goal-based investing to associate different asset allocations and management strategies to each and every goal of an individual. This allows for an infinite number of customer profiles, and truly tailored automated wealth management.
We also don’t consider total automation to be the end objective. Smart technology, artificial intelligence and process automation are only means to make our human advisers better, faster and available where they matter the most: listening to our customers and understanding their more complex needs in detail.
Nalo life insurance policies are administered by insurance giant Generali. What have you learned from this partnership so far?
We are very proud to have a commercial agreement with Generali Vie in France. They have been pioneers and market leaders in online life insurance since the early 2000s. In fact, the choice to work with them was easily made, since they are currently the only partner with sufficient technical capacity to handle our tailored, goal-based solution the way we imagined it.
Any partnership between a startup and a big corporate is a challenge. Decision timescales are wildly different, for example, with the startup having an average cycle of one to two days, and the corporate one to two weeks! This is probably the biggest hurdle to overcome. We are all the happier to have found with Generali a pattern that works.
Aside from process, we also learned a great deal about regulation, specifically in the insurance space. With MIFID and PRIIPS regulations steaming full ahead over the past months, it has been very helpful to have such a robust partner to help us think about how to best natively design our services.
What’s next for Nalo? Any plans to diversify your offering?
We have a lot planned ahead of us! Since the summer, we have been live with paying customers. It’s a great feeling to see people interacting with and appreciating our platform. The feedback has been excellent, and has given us many ideas around the next version of process and design. We have also started work on expanding and enhancing our existing product Generali (it’s too early for me at this stage to say more). We are also considering developing new financial products such as brokerage accounts. We will prioritise as customer feedback continues.
2018 will be a fundraising year for us. We are planning to raise an order of magnitude of €1m. The €400k seed that my co-founder and I put into Nalo brought us a long way. We now need more punch to continue our product innovation, maintain an acquisition and communication budget and grow the team.
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