You work hard for the money! Which is precisely why Stephen Alred wants to create a cohesive relationship between entrepreneurs like you and the cold-hard cash you earn. Over the last year, Alred has worked day and night (literally) to create Ignite Financial, a fiscal planning platform with fewer barriers to access like many traditional models that exist today.
Alred wants you to chase the lifestyle that stacks up to your own expectations, so we caught up with the fintech intellect to find out how he makes your money talk.
What is your background and why did you launch Ignite Financial?
My career started when I launched my first business in college doing financial consulting for young entrepreneurs. I’ve worked at a massive insurance firm, a company specializing in high net worth Wealth Transfer clients, and a boutique wealth management firm. My purpose behind launching Ignite was to create an innovative organization in the financial services space. I’ve heard a lot of people say it wasn’t possible, and I wanted to prove that you can build a high-touch, high-tech, fee-only financial planning firm.
I thought it was time to bring the fee-only model into the modern age by integrating tech partners into our service model, and charging clients exactly like they would pay for Netflix, Spotify, a monthly gym membership, or cell phone bill.
Can you give us an overview of what Ignite does?
Ignite helps people build a healthy relationship with their money. Our mission is to help people build a life that they can truly enjoy. We’ve found that a lot of people don’t understand how to use money as a tool instead of as a currency. They end up chasing a dollar amount either because that amount is stuck in their head or they read it somewhere.
I thought, ‘there is a surprisingly high number of unfulfilled people with high incomes in the world. They chased a number, then when they caught it, realized that there was nothing else so they chased an even higher number. What happens if they chase a lifestyle instead? Then when they reach their ideal life, they simply enjoy it.’ That’s what I created in Ignite. We create strategies for clients to pursue the life they want, not an arbitrary dollar amount. We want to show them how they can build their ideal life and serve as their financial co-pilot to keep them on track.
What problem are you solving?
We aim to solve the issue of accessibility to fee-only financial planning. Half the time I meet someone and tell them about my firm, the first thing out of their mouth is usually either “I need that but can’t afford it” or “I don’t have/make enough to need your services”. However, studies show that most financial decisions with long-term effects are made in your 20s and 30s. With the way time value of money works, the right time to get professional financial advice is literally yesterday (regardless of how much you make). But, it’s always been hard to find someone who can serve you without glaring conflicts of interest or at your income/asset level. That’s where Ignite comes in.
The large majority of fiduciary financial services organizations either have high retainer/asset under management fees, high asset or income minimums, or high upfront costs (or some combination of those three). We choose to steer away from those high barriers to entry. Our services range from $25-325 per month and charge 0.65% for any investments that we manage, we have no asset or income minimums and don’t charge any upfront fees.
How does Ignite disrupt the financial industry?
With the tech we’ve been able to build our infrastructure on, we are able to offer financial planning at a scale that’s in our clients’ best interests. Making advice accessible to households who don’t want to hire a financial professional paid by commissions. We built our client experience to be modeled after SaaS companies. Signing up as a client is incredibly easy and can be done on our website. We are about 99% paperless, utilize video conferencing software to serve clients all over the country, and we operate outside of normal business hours.
I used to hate when banks only operated during the hours I worked. I bet a lot of people don’t like when they’re trying to buy a car on a Saturday or put together mortgage paperwork at 7:00pm and don’t have access to their financial planner for guidance or to see their bank accounts, net-worth, or investment portfolio. We meet with people on the weekends and late into the evening, whichever is most convenient for them. Ignite partners with a few FinTech companies that give our clients access to a “living” financial plan that updates as they live their life. They can check it 24/7 and see their progress towards their financial goals, their net-worth, or how their investments are doing.
Most importantly we are poised to disrupt our industry because many fee-only financial planning firms won’t take clients who make under $200,000 or a net worth under $1 million. If the top 5% in America have an approximate income of $159,169 or a $1.8 million net worth; this means that more than 85% of the US have zero access to personalized, fiduciary financial advice. Ignite blends the technology that allows us to scale and keep our fees low, and the human aspect that allows our clients to receive an amazing experience and personalized advice for all of their financial needs.
How does Ignite help startups financially?
On the B2B side we work with organizations to offer on-demand access to our financial planning experience for their employees. PricewaterhouseCoopers, in their 2016 Financial Wellness survey, found that 47% of employees spend three hours or more of their working hours thinking about or dealing with their financial issues. For a salaried working making $50,000, that can be $300/month in lost productivity. This stat hit home and made me realize we needed to figure out a way to work with companies as well. The benefit for them is an increase their employee productivity, engagement, and retention. They could also use it to bolster up their recruiting strategies. We figured if we could charge $25-95 per month, per employee, we could still offer them a net positive result when looking at the cost of lost production and employee churn.
What should entrepreneurs consider before or during the financial planning process?
It is a well-documented fact that many entrepreneurs don’t do a great job saving for the future. It’s understandable to want to funnel any profits back into growing the business and commit to the success of their venture. Unfortunately, a lot of businesses fail and then the founders who started it have nothing to show for all of the hard work they put in. The advice that I give to entrepreneurs is to remember that their wealth is tied into the business and many times is only on paper. Without a plan to convert some of that “paper wealth” into personal wealth, you risk never being able to extract your value from that venture, if that venture were to fail.
Figure out a number, it can be revenue or profits, for you to begin the process of investing for your future. Once you hit that number, you have to get the ball rolling or risk putting your personal finances into immense stress that could have been avoided.
Why did you decide to launch Ignite in Atlanta? How has the community been supportive?
What’s not to like about this city? The food, the culture, the energy, the seasons. I launched in Atlanta because of the buzz around the city. First, I noticed how much the local government has done to nurture innovation. Then, I began attending a lot of events around the city. There is so much happening in the startup and tech space that it’s hard to choose anywhere else to launch a high-tech financial planning startup. Also, it’s a hotbed for our target market! One of our key niches on the B2C side is millennials and there are about half a million living in Atlanta.
The community is amazing. I felt intimidated my first year here because I’m not tech or sales savant and felt I needed to be in order to associate with all of the talent. I felt like just a financial guy even though I felt like a startup founder trapped in a financial planner’s body. Once I felt more comfortable and confident, I began making more connections in the startup community. Since I launched Ignite in March, I’ve felt a lot of support and encouragement. This is something that I created to be a new and edgy take on something that is seen as old and boring and I believe people respect (and some even appreciate) that. There are so many that have made themselves accessible for me to pick their brain and get advice. This was definitely the best place for Ignite to launch, can’t imagine it any other way.