Ribbit Capital is a global investment organization with one single, relentless mission: to change the world of finance.
This report was sent to its investors and talks about the history, evolution and the current trends in the wealth management industry. Here are some highlights.
The world has changed a bit in the past four decades – there is something we like to think about much more: what might Chuck Schwab have built in a world with over two billion smartphones? Luckily for all of us, there are quite a few entrepreneurs around the world who have been asking that question in one way or another.
And they are starting to chisel – or, in the cases we like best, to sledgehammer – away at the foundation of the wealth management establishment.
We see the beginnings of some remarkable things from this new crop of entrepreneurs: sophisticated digital investment advice for customers with less than $1,000 to their name; brokerage accounts that you can open and fund from your phone in less than the time that it takes to get a Schwab support rep on the phone; U.S. stock trading – the very foundation of the business Chuck Schwab built – being offered for free; and global payments companies (yesterday’s vendors!) starting to dabble in wealth management themselves.
Did you know that Yu’e Bao, the money market fund launched by Ant Financial (the financial services spin-off from Alibaba) from a standing start, went from $0 in assets to over $100B in assets in less than two years. For reference, it took nearly 20 years for Vangaurd – and almost 40 years for Vanguard’s flagship money market fund, Yu’e Bao’s direct comp – to hit the same mark.
Schwab took over six years to accumulate its first $1B in AUM; Wealthfront and Raisin each did the same in about 1/3 of the time. Schwab reached 1 million accounts in 1995, over 20 years after getting started; Robinhood managed the same in less than 2 years. Coinbase, an investment platform for crypto-assets, has acquired over 10 million users since 2012.
Read the full report here.