Sisu: Frictionless Financial Planning
In late 2017, the team at Sisu Capital began working on a new vision for financial planning and optimization. Today we are excited to announce that vision to the wider world. In this article, we’ll introduce our vision and show you how we are planning to improve the financial future of middle-class Americans.
Financial Planning and Implementation Today
There are 160 million middle class Americans. Research shows that 81% of them have no comprehensive financial plan and the majority struggle to manage finances properly and continuously¹²³. For middle-class Americans that do want to plan their financial future, it is often not easy. Even a visit with a financial planner can be overwhelming, and doesn’t always result in significant results without further actions on the client’s part. This is because a traditional ‘financial plan’ is just that — a plan — which requires proactive engagement, continuous fine tuning, and flexibility to be successful. Additionally, a conflict of interest may exist between the goal of the client to increase their net worth, and the incentives of a professional adviser to generate commissions. For many, the financial planning experience is an enigma, and begs the question: Is there a better solution?
Financial planning: Ripe for Improvement
A better solution is on its way. Sisu is planning to develop an innovative new technology, designed to overcome the inefficiencies and contradictions of the current financial planning industry. Sisu’s goal is to create an effective automated financial planning solution, intended to be integrated with online banking systems that consumers are already using. By utilizing these already-familiar channels, Sisu aims to eliminate the intimidating and often overwhelming process required by consumers to implement and maintain a traditional personal financial plan.
This solution, SISU, is intended to enable individuals to automatically plan their finances, set aside funds for savings, and invest in tax-beneficial retirement products. We anticipate that financial planning will occur in small incremental steps, utilizing nudging and gamification principles. This method is designed to ensure that individuals can easily and intuitively set up and maintain their personal automated financial strategy while improving their financial situation. It aims to be completely frictionless, and unlike any financial advisor or robo-advisor on the market today.
The Features of SISU:
We anticipate including several different features in the platform, including:
1. Basic Financial Optimizations:
SISU intends to recommend and execute general financial steps, such as paying off credit cards, consolidating debt, finding better APRs, and improving credit scores.
2. Tax Optimization:
SISU intends to encourage and enable individuals to invest in tax-deductible saving plans such as IRA, HSA, and 401(k) accounts.
SISU intends to encourage individuals to increase regular savings and to invest those savings in appropriate instruments that align with their risk profile and long term investment goals. If the individual chooses, the solution can round off transactions and put those amounts in saving accounts, thus increasing savings in the background.
4. Risk Optimization:
SISU intends to recommend ways to optimize the client’s insurance coverage, such as helping select mortgage, auto or life insurance, and provide tips for diversifying investment risks, such as balancing stock, bond and real estate portfolios.
5. Planning Ahead:
SISU intends to help the individual establish specific financial goals, such as saving for retirement and planning for children’s education, and to facilitate implementing the accompanying plans.
6. Advanced Finance:
SISU also intends to offer advanced financial tools, such as daily debt repayment programs and insurance coverage by pooling risks with peers to lower insurance costs.
This list is non-exhaustive and SISU may offer additional features, as well as expand on the current features listed above.
Sisu’s Road Ahead
Sisu has a vision for the future of financial planning, in which individuals can automatically aggregate their financial accounts and data into a single location, and rely on complex algorithms to identify and capture financial opportunities, incrementally growing their long-term net worth with almost no effort.
To make this vision a reality, Sisu has already invested significant amounts of resources in the preparations for developing SISU. However, we are now at a point where additional capital is required to develop the minimal viable product (MVP), implement the solution, and launch operations.
For this reason, Sisu has recently filed confidentially with the SEC for a Tier 2, Regulation A qualification. This qualification would allow Sisu to offer equity in the form of ‘security tokens’ to US investors. Why we chose this qualification, and how the equity offering will work in practice, is the topic for another article here on our Medium blog. We believe that this is the best way forward to bring SISU to fruition — allowing us to provide a solid financial future for middle-class Americans.
1: Certified Financial Planner Board of Standards and the Consumer Federation of America. (2013). Financial Planning Profiles of American Households: The 2013 Household Financial Planning Survey and Index. CFP. http://bit.ly/2Jb5kep
2: Board of Governors of the Federal Reserve System. (2017). Report on the Economic Well-Being of U.S. Households in 2016. Washington: Federal Reserve System. http://bit.ly/2zq90JP
3: MassMutual. (2017). MassMutual Middle America Financial Security Study. Springfield: Massachusetts Mutual Life Insurance Company. http://bit.ly/2NJ6QYX