Finance Intermediaries

today’s post addresses less FinTechs themselves and more about those intermediaries who often help us get to the financial services that we need.

The inspiration for this post came after overcoming a general resistance I have. Basically I had an ad come up on my Facebook timeline, which is something I don’t remember agreeing to and more often than not annoys me. In this case, however, I actually saw it as good match for what DS looks for, so I had to check it out.

This intermediary is called Ich investiere Grün (I invest green in German) and very simply what they do is match investor’s interests and profile with the green investment companies they have in their network. You simply put your data in their form, they also complement information with a quick and friendly phone call, and the result is an email with contacts of potential investments and their providers. Also if you agree to it, they send your contacts to the companies for them to reach you directly, which is also quite convenient.

What makes winning intermediaries

– Clear message and focus: the most important element when an intermediary ties to gain interest is to efficiently present what they do. In the case at hand, Ich investiere Grün offered a clear combination of 1- Green investments, 2- income-generating projects and 3- implied technology-affinity given the online onboarding process.

– Transparency: another fundamental aspect is clarity on how the intermediary gets paid. Not only do intemediaries connect two sides, but they also earn remuneration by doing so. Disclosing from whom and how much the intermediary gets per transaction, however, is often a higher standard than most.

– Deliver: ideally when going through an intermediary, clients should be able to get the best deals out there. At the very least, to keep people coming, the intermediary needs at least to offer something better than what an individual would find on their own.

– Latin American example: the Brazilian fund brokerage market has seen huge changes in the past few years. From the convention that bank clients would only have access to the funds their own bank offers as a practical investment, this new broker XP promotes freedom from one or another bank by offering a full range of funds. Key to their growth strategy, the company has a well-established reward system for independent agents who can bring new clients to XP. In this sense, they act as an “open source” investment platform, which is by no means perfect, but offers a clear alternative to limitations in what the market had until they came along, relying heavily on intermediaries.

Going above and beyond

– Personal contact: admittedly this is not for everyone, but for me the winning combination of a good online presence with a meaningful real life contact is just unbeatable. There will always be clients who prefer offline or online, but restricting your business to only one of those is in my view a restriction rather than focus.

– Evolving with clients: last but definitely not least, the perfect intermediary is not only statically doing the match making between clients and providers, but they also have the ability to adapt as demand and supply evolve. Not only reactively, this segment has the potential to anticipate market changes because of their pivotal role, and therefore the best ones are those who manage to position themselves well and “surf” the changing waves that unavoidably move markets.

Only marginally about FinTech, we will soon follow with by more details about DS’ next investments, so come back soon for more content.


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