Online advisers target the best and brightest new hires

When online investment manager FutureAdvisor announced earlier this month it had raised $15.5 million in venture capital from Canvas Venture Fund, the startup said a large portion of that money would go toward new hires.
And they aren’t the only so-called “robo-adviser” planning to tap the best and brightest new talent from inside and outside the advice business. Other firms in the space also are searching for top candidates, hoping to lure them to the online startup world.
Having brought its automated investment platform out of beta in September with $13 million in assets under management, FutureAdvisor has seen AUM grow nearly 800% to $100-million-plus today. With that growth, the firm hopes to double its workforce to 40, from 20, by the end of the year — with new hires planned in software engineering, marketing and customer service.
“We’re looking for people who have been part of a team and have a high bar for customer service. It would be great to find people who have wealth management experience in their background,” said Rebecca Lynn, general partner at Canvas Venture Fund.
“For FutureAdvisor’s customer service new hires, experience in investment advice and qualifications like CFA, CFP or RIA really count, since they’re in direct contact with people asking for guidance,” said Ms. Lynn, who sits on FutureAdvisor’s board.
She added that FutureAdvisor now has two former employees of Fisher Investments, a large independent investment advisory firm founded by billionaire investment guru Ken Fisher. Those hires are Brian Perez, a former group vice president of client services, and Megan Graf, a former client service specialist.
(Read Ms. Graf’s blog about why she left the traditional adviser model for a robo-adviser.)
“Right now, I value exposure and experience more than compensation,” Ms. Graf said, adding that while she took a slight pay cut at her new firm, her compensation will be enough to maintain her current lifestyle. “In 15 years I want to be an executive, and I want experience working with innovators. When I think about the third, fourth and fifth steps in my career, this will get me there.”
Ultimately, FutureAdvisor’s new hires will possess an entrepreneurial spirit that mixes industry knowledge with the love of working at a scrappy startup, Ms. Lynn said.
“People who want to work on Wall Street work on Wall Street. People like Megan who see where the future is going are the kind of people that we want,” she said.
Online adviser Betterment also has plans for new hires. In fact, Betterment closed a $32 million round of venture funding in April, and the firm’s plans are to spend 60% to 80% of that on new hires, according to Betterment founder and chief executive Jon Stein.
“We’re at 57 employees today and will have 75 to 80 by year-end,” Mr. Stein said. “We’ve hired people from tech firms, traditional banks, people on staff from JPMorgan, Goldman Sachs, Barclays, Ph.D.s, CFPs and CFAs, and we’re looking to hire more.”
Mr. Stein reported that Betterment is looking for senior investment analysts and investment writers to communicate advice to customers. The startup recently hired an astrophysics Ph.D. from Goldman, Lisa Huang, who’s on the firm’s investment team. In addition, it recently hired Alex Benke, a certified financial planner from JPMorgan who also had gained advisory experience working at his father’s advisory practice.
“A lot of forward-thinking candidates are reaching out,” Mr. Stein said. “I get a number of messages every day from people at Wall Street banks saying, ‘I’ve been watching you, I like what you’re doing and I’d like to ask you about a job.’ Banks are slow to change. It’s hard to get things done.”
Similarly, online investment adviser Jemstep Inc. announced in October it raised $4.5 million in venture funding. Jemstep now plans to use a portion of those funds, along with revenues earned, to add to its current roster of 22 employees.
“We’re actively looking to build out our partnership team, given our focus on working with RIAs and 401(k) advisers,” Jemstep president Simon Roy said.
Mr. Roy noted that Jemstep seeks new hires who have the skills to do the job, are a good cultural fit, share Jemstep’s values about maintaining good customer relationships and have knowledge about the advisory industry. Jemstep then gives solid candidates a mini-case study that replicates the work they’d be asked to do, he said.
“We quickly gauge how the person focuses on the problem and get a sense of the flexibility and openness to think outside of the paradigm they came from,” Mr. Roy said.