Wealthtech

Inside personal finance app Albert’s ‘Genius Bar’

The personal finance company combines automation across banking, investing and insurance, alongside human advice

Personal finance apps like Albert tout a future where money management happens automatically with minimal human intervention. Bill payments, savings, investing, you name it – everything just happens in the background, while consumers focus on living their lives.

Culver City, California-based Albert strives to achieve just that, but with a twist: it makes team members called “geniuses” available to its 5 million customers 12 hours a day, 7 days a week. The company, which in late January raised $100 million in Series C funding, is on a mission to move past the familiar refrain of “set it and forget it” to an automated financial life that’s supplemented by tailored advice from its team members.

“It’s important to automate as much as possible [but] you also need the customer to be involved,” said Yinon Ravid, co-founder and CEO of Albert. “If you truly set it and forget it [for all financial use cases], it turns into burying things under the rug.”

The Albert app, which was launched in 2016, offers customers capabilities to automate savings and investing. Other features include earned wage access and insurance.

Albert was an early mover in a personal finance field that has exploded in recent years. For instance, large banks like Bank of America, JPMorgan Chase, Royal Bank of Canada and TD Bank have launched their own digital personal finance and investing capabilities. But Albert strives to differentiate itself by offering human assistance alongside automation capabilities typical of nonbank financial apps.

Like other personal finance and investing apps – including Digit, Qapital, Acorns, Stash and many others – Albert aims to become a focal point for most of its customers’ financial needs. Instead of offering insurance products through partners, Albert offers them through its subsidiary Albert Insurance Services. The company also offers bill negotiation capabilities.

“You can text [geniuses] any financial question,” said Ravid. “We are bringing this white-glove financial advice to young Americans at every income level.”

In addition to human advice, the Albert app offers customers automated personal finance guidance. Albert’s typical customer is under 45 years of age and earns less than $100,000 per year.

For saving, Albert lets customers set aside money at regular intervals, or customers can allow the app to analyze transactions and automatically move money into a savings bucket.

“You can enable what we call smart saving, which lets the user put it on autopilot … or if you want more control, you can set different schedules,” said Ravid. “We find that most customers like the smart savings feature and they just want to put it on autopilot.”

For investments, the company, which has a broker-dealer license, offers portfolios that are based on customer goals, risk tolerance and desired time horizon. Albert also lets customers select holdings from a curated list of themes.

Albert said it generates most of its revenue from subscriptions. The terms – “pay what you think is fair,” starting at $4 per month and capping at $14” – are based on its analysis of rates that would be considered economically sustainable and are aligned with a customer’s financial situation. Other personal finance apps also have monthly subscription plans, including Digit and Qapital.

Effects of the pandemic

Investment apps experienced 88% growth in average sessions per day from January to June 2020, and sessions for banking and payment apps combined increased 26%, according to a study from app marketing platform Adjust and app analytics provider Apptopia.

While the pandemic accelerated digital adoption of financial products, pain points from Albert customers have remained constant over the past few years, according to Ravid.

“Our customer and the broad American consumer has not really left the 2008-2009 recession [and] real wages have stagnated,” he said. “The large part of digital adoption has been prompted by customers looking for services to help improve financial wellness.”

What’s next for Albert

With Albert’s Series C fund raise, the company has raised more than $170 million in total. The Series C funding round, which was led by General Atlantic, will go toward enhancing the product suite and growing the team, according to Ravid. Albert has more than 100 employees. Future offerings include a digital banking product, and the company plans to grow its internal financial advice news service, The Post.

In the digital banking arena, Albert faces competition from well-capitalized digital challenger banks that have large customer bases, including Chime, which reportedly has 12 million customers. But Ravid suggested Albert’s comprehensive suite of offerings, along with human advice, will help it build lasting relationships.

“What you can expect is something that works pretty magically and seamlessly with all of Albert’s products and human guidance, giving users a truly automated seamless experience across all of their money,” he said.

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