Marstone, a fintech platform that automates the investing process for retail clients and reduces back-office costs for financial institutions that offer it, recently announced the second closing of a $5 million Series A investment round.
The Providence-based company has now raised more than $20 million in total funding. The Florida-based community bank Amerant Bancorp led this latest round with a $2.5 million investment, and the company is well positioned to take advantage of the shift in digital banking trends that resulted from the pandemic.
Rhode Island Inno caught up with Marstone’s CEO Margaret Hartigan to discuss the latest fund-raise, trends in wealth management and financial planning, and life during the pandemic. This conversation has been edited for length and clarity.
How did Marstone fare during the brunt of the pandemic last year?
In February 2020, a month before the pandemic, Marstone was engaged by a roughly $125 billion mutual fund company to be its digital wealth platform for its direct-to-consumer offering. This and other mandates, coupled with the first close of our series A round, certainly helped us navigate the pandemic.
With hopefully the worst of the crisis behind us, we find ourselves in an incredible position. The pandemic has forever shifted how we work and our expectations to conduct business digitally. As a result, firms are sprinting to identify and launch digital solutions for employees and clients.
As you mentioned in the funding announcement, Marstone plans to "further diversify the financial planning and wellness toolset offered via its platform." Can you elaborate on what some of these tools might be?
We have been working on a new part of our ecosystem for some time and are incredibly excited to bring these tools to market. To that end, later this year we’ll be releasing an interactive financial planning and wellness tool. The tool integrates seamlessly with banking and credit and investment platforms so people can access their total financial picture in one place. It’s highly visual and intuitive.
Early testing is showing that once intimidating and complex ideas around money and math fall away, the user is both educated and empowered. The tool is designed so it can not only help educated investors who already have wealth, but also people who are just starting their financial journey.
Why is financial planning such an important complement to wealth management. Where and why do you think traditional wealth management platforms struggle to offer financial planning services?
To date, our industry has struggled to connect all the pieces of a person’s financial situation. Many people think of their money and bills in buckets: household, education, retirement, travel, debt, etc. Everyone, regardless of affluence and education, needs help seeing and organizing those buckets in one place. That is the first step.
The second step is identifying the accounts or sources of data for each of those buckets. From there, we need it all to talk to each other so that the picture and plan is accurate and up-to-date. Much of financial services happens in silos — banks, investment firms, planning software, credit card and mortgage companies, and the data doesn’t talk to each other.
Firms like Marstone help connect these sources of data so that a user has a clearer picture of all the moving pieces of their financial life. Once this is in place, then the user — with or without a financial advisor — is educated and empowered to start planning and investing with confidence.
What was it like raising money during this stage of the pandemic? Is it similar or different from past raises?
It’s incredibly different to raise capital in a pandemic. The pandemic created tremendous uncertainty, which paused a great deal of commercial and investment activities. Now, with hopefully the worst of the pandemic behind us, we have seen a resurgence of deal interest by clients and institutional investors. I’m very excited about our commercial deal activity and honored by the amount of unsolicited inquiries for a future Series B round.
