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Apply HN: Nickel is personal financial planning for free

11 points by threefour ↗ HN
Problem: At a certain age many of us would like to have a financial plan: a plan for savings, investments, insurance, and taxes, for now and into the future. But making a plan is hard. Hiring a professional advisor to make a plan costs on average US$2,000. LearnVest only costs $299, but they only give you a static PDF file.

Solution: Nickel is TurboTax for financial plans. You answer some questions and Nickel generates a financial plan. For free.

There's many ways we could generate revenue, but for now we're focusing on improving our design and algorithm.

Prototype: https://nickelhq.com/nickel

About Us: Dan and I have been friends since college at New York University. Dan is a certified financial planner and has advised families for over ten years. I'm a product designer with FinTech experience and recently designed an insurance sales web app for MetLife. We met Ashish, a full-stack JavaScript engineer, right here on HN!

Why YC? We've bootstrapped our way to our tenth prototype and feel confident we have something people want. We need some money to work on this full-time and guidance to turn this into a proper company.

15 comments

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tinkerrr
This is great but ... rudimentary. The same advice on 'create a 6-month emergency fund' no matter the financial situation, without regard to the cost of such a plan (in lost returns) and taking into consideration that depending on your financial situation, getting that amount in credit isn't that difficult.

Similar thing with life insurance. Sure, it is great for some. But when I entered that I am single and have no kids, it still recommends life insurance. Why exactly? It is known to be bad from an investment point of view - insurance should be bought for insurance reasons anyway.

Similar situation with renters insurance - without knowing what my belongings are worth, how can you recommend that I need renters insurance up to $500 per year?

p.s. the app doesn't work if you have ublock origin installed. Just an FYI.

threefour
Thanks for the feedback!

Yes, it is rudimentary for now -- it's a prototype after all. There's only one 'financial philosophy' built in to the algorithm, and it's quite conservative about lowering risk. But we think in the future it'll be useful to be able to switch philosophies with a single click.

Regarding life insurance, it only recommends it if you have a spouse, partner, or children. If not, it explicitly says, "Life Insurance: Until you have a spouse, a partner, or kids you probably do not need life insurance." If you're seeing something different it's a bug. I'd love a screenshot if you have one: victor@nickelhq.com

brudgers
It seems to prioritize savings for a vacation over savings for children's education.
threefour
It should only allocate savings for vacation and the user-defined goal after saving for everything else. There's two separate loops in the code. But I'll verify it's working correctly.
brudgers
It also allocated to the user defined goal before children's college education.

My advice would be to reduce the number of inputs and achieve a testable range of permutations as the minimum viable product...then test the hell out of it so that features can be added without regressions.

My impression is that the state space is enormous given the number of options and it is unlikely that any individual can hold the corner cases in their head given the combinatorial explosion.

Good luck.

brudgers
Curious regarding Nickel's roadmap to monetization.
threefour
For now we want to learn as much as we can about how people get value from a tool like this and then try to align the revenue model with the value. While we'd like to make some money now, our costs are very low so we can continue to give away the planning for free.

Google's model might work for us: they give away a lot of resources for free and help a lot of people, and they charge certain segments of their audience that can afford to pay. So while people are accustomed to paying advisors for a plan, we think it's better for our audience and a competitive advantage to be free.

There's other ways that people are accustomed to paying advisors now that could work. For example commissions on insurance sales. The price of insurance is fixed by regulations in the U.S., so you pay the same price regardless of where you buy it; might as well buy from us and get a free financial plan too :-)

Another company tried charging for plans, but that didn't seem to work, they've since changed their model. We think it'll be better for our customers and for us if the financial services companies pay for this somehow.

brudgers
Interesting. I thought that insurance regulations varied from state to state in the US and that each state requires their own license for sales...anyway, I wonder whether monetization via sales of insurance create a tension between neutral financial advice and the business strategy of the platform.
threefour
That's true, states do regulate insurance including licenses for sales. And there's some Federal regulation too.

The tension between commissions and neutral financial advice is an important issue. Sometimes advisors disclose their compensation but not always. In our case we could not only disclose that but also reveal the logic and math behind the recommendation. The rules aren't a secret; anyone can look them up in a book. The value we add is not having to look them up, and then reconciling all the different rules into an algorithm that takes all the variables into account.

danieldordine
Hi Brudgers, I'm a co-founder of Nickel. Regarding disclosure: we will fully disclose to Users how the company works, how we are compensated, and provide full fee transparency and any potential conflicts of interest (like advice vs. the sale of products). Most planners and advisors also manage investments and/or sell insurance products: it's a matter of full disclosure. Customers will be receive a comprehensive financial plan (that can be saved and updated) for free. We believe that's valuable, but what's infinitely more valuable is implementing that plan, and that's where we'll deliver, because we plan to make it easy for Customers to do so. For example: telling a couple with two kids, a mortgage, and only one working spouse that they need life insurance is valuable, but making that insurance one click away is even better.
brudgers
Beside insurance sales is their another monetization strategy with fewer regulatory hurdles and a less commoditized market?
danieldordine
Hi Brudgers - Thank you for the feedback. We are evaluating a number of alternative revenue options. (Most come with plenty of regulations and oversight requirements - the nature of the beast in financial advice/insurance.) I have favored the insurance revenue model (at least in the beginning) because we can be up and running (i.e., open for business) in one or two months, and fund growth strictly off of revenue. But you raise a valuable point. As Vic mentioned, we're hoping to mine the feedback of the financial plan users to determine appetites for buying, etc. The price compression and commoditization in the crowded investment management ("robo") space (i.e., <20 basis points annually on assets) tends to make that approach less attractive in the beginning.
ryporter
Whom do you consider to be your competitors?

The space of automated financial advice is becoming very crowded, but much of the focus so far has been on investments. Is it fair to say that part of your differentiator is that you aim to provide a holistic analysis of a family's entire financial situation?

threefour
Exactly: automated investing is crowded, but our holistic analysis is different.

Besides LearnVest, there's PolicyGenius (https://www.policygenius.com) who does a good job evaluating your need for individual insurance products and then selling them. They don't do financial planning.

Investment managers such as Personal Capital and Vanguard offer access to advisors if you meet a minimum of assets under management, but the advice is mostly about investing.

SmartAsset and Nerdwallet are focused on content and calculators but have enough funding to move into planning in the future.

Any of the following companies could move into our space, although they all have channel conflicts: Robo investors (e.g. Betterment), Insurance (e.g. Prudential), Banks (e.g. Wells Fargo), Financial planners (e.g. Ameriprise), Investment managers (e.g. Vanguard), Advisor-facing software (e.g. eMoneyAdvisor)