Financial advisors aren’t cheap to use. They aren’t always seen as trustworthy, either, with many advisors receiving — or perceived as receiving — incentives for recommending certain products over others.
Grove, a two-year-old, San Francisco-based startup, is taking on both of these issues through software that makes it easier to its own financial advisors – who are paid a straight salary — to help greater numbers of people, and more cost-effectively.
Specifically, for $600 a year, a customer can talk with or email his or her financial advisor about all kinds of big and small decisions, from which index funds are worth considering, to whether a particular house is within reach given that person’s retirement goals.
So far, the company has just 12 employees, half of whom are financial advisors and the other half of whom are working on the product itself.
Cofounder and CEO Chris Hutchins won’t reveal how many people each financial advisor is working with currently out of fear that it might give away too much about the young company’s revenue. But generally speaking, the number of clients who advisors work with can vary widely, from tens to many hundreds. (In a 2016, Barron’s article of the “best” 1,200 financial advisors in the U.S., the advisors worked on average with a stunning 520 families.)
Either way, Grove’s investors — many of whom are athletes — think the company is on to something. Just five months after announcing $2.1 million in seed funding (money that Hutchins says was raised a bit earlier, in 2017), Grove has closed on $8 million in fresh funding.
Defy Ventures, launched last year by veteran VCs Trae Vassallo and Neil Sequeira, led the financing, with participation from Tusk Ventures, Bullish, and Winklevoss Capital. The round also included, among others, NBA star Kevin Durant; former football player Patrick Kearny; and former football player Ryan Nece, who today runs the venture firm NextPlay Capital.
Asked about Grove’s connection to star athletes, Hutchins — who’d earlier spent several years as an investor with GV — says Grove “struck a chord with them. Many know people who had a lot of money and worked with financial advisors but who didn’t always get the best advice or work with people who had their best interests in mind.”
They like the idea of unbiased advice, suggests Hutchins. They also like that one needn’t be a professional athlete to afford it.