Elevator Pitch is a regular feature on Lifehacker where we profile startups and new companies and pick their brains for entrepreneurial advice. This week, we're talking with Damien Klassen (Chief Investment Officer) and Tim Fuller (Head of Operations) at Nucleus Wealth.
In 128 words or less, explain your business idea
Nucleus Wealth brings the best of passive and active investments to the Australian public. The passive investment space (with limited management of your capital by a fund manager) is dominated by “robo-advice” companies that have sprung up to offer low costs and convenient access, but only offering vanilla passive investment products.
Nucleus leverages similar technology and low costs, but instead offer the same service that an institutional investor or professional investor would expect: tactical asset allocation, active stock picking, full transparency into all holdings, ethical overlays for each individual client, portfolios tailored to the client’s individual risk and income needs
What strategies are you using to grow and finance your idea?
In the initial stages, Nucleus’ investment processes have been funded by Damien Klassen and Tim Fuller. We have partner companies that share costs of licencing, research staff and operational costs.
The investment technology platform and processes are an amalgam of ideas from Damien’s 25 years working for leading brokers and fund managers, and have been built on the latest cloud technologies. We have sourced most of our clients so far through online blogs and we have proven our technology can run the system and make market-beating investments.
To date, we have found that by blogging and podcasting our investment ideas in detail, more sophisticated and higher net worth investors have been willing to back us.
How do you differentiate your business from your competitors?
Nucleus sits in a relatively unique space between high cost financial planning and low cost robo-advice. We are the only service of our kind in the Australian market. We differentiate our offering from the online advice and investment services by providing an active (rather than passive) and radically more sophisticated investment product, tailored to each client’s unique needs.
Importantly, we have been able to offer all this at a similar cost to passive investment service providers. Our offering differs from high cost financial planning as we remove multiple layers of fees, providing our customers with direct access to shares and unparalleled transparency as individuals can see where every dollar of their capital is going.
What's the biggest challenge facing your business?
Investing is a daunting and complicated process that can be overwhelming for most people. While we get traction providing our service to sophisticated investors with a deep interest in their investments, marketing our offering to the less experienced is more difficult.
The industry targets these everyday investors by typically featuring financial ads that are bland with lots of images of beaches, boats and a comfortable retirement to make the clients feel good – deliberately avoiding any details and focussing on feelings.
The key challenge for us is striking the right balance when pitching to less financially savvy customers in a way that explains the advantages of investing without being so bogged down in detail that they lose interest.
What one phone, tablet or PC application could you not live without?
Python (software language). As a “glue” program that binds together databases, statistical programs, websites, data feeds and spreadsheets, Python has few peers. Increasingly, we find that the active community and enhancements means that python can do more and more of the tasks and its used less as an interface between specialist programs and more as a replacement for these programs.
What's the best piece of business advice you've ever received?
Observe a market and find ways to solve the flaws in common solutions. Create a system that can then handle rapid development and scalability, and improve it - continually. Too often in software or investment processes, the grand unifying product gets delayed and key features get ditched in a last-minute effort to hit deadlines.
This leaves everyone unhappy and disappointed. Creating a system that can be continually improved is less stressful for our staff, more productive and more reactive to customer needs.
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