Borderplex native aims to shake up financial industry with digital investment service
Garcia, 37, who was born in
This is Garcia's third financial-services startup, but the first not aimed at institutional investors. His first company, Fundspire, which developed risk-management software for financial institutions, was sold by Garcia and two partners in 2012 for millions of dollars, he said.
Garcia said his aim is to shake up the financial services industry, which, he said, "thrives on complexity and lack of transparency," in a similar way that Amazon founder
Amazon used the Internet to make it easy for consumers to choose and buy books, he said. Finhabits combines investing technology with investment advice to make it easy and automatic for anyone to invest based on personal goals and habits, he said.
"My mission is to change the retirement savings gap," especially for Hispanics, who are well behind other groups in retirement savings, he said in a recent interview in
Finhabits' clients can set up long-range or short-range investment accounts from a smartphone or computer in just a few minutes, Garcia said.
Clients can invest as little as
They can set up a Individual Retirement Account, or IRA, for a million-dollar retirement goal or a portfolio designed to save a few thousand dollars for a short-term goal, such as remodeling a kitchen, he said. Investments are made in Vanguard and
Finhabits, a
"If we are successful, we will develop (saving) habits that will transform multiple generations of families and will help close the retirement gap in this country," he said.
Many Latinos work for small companies without 401(k)s or other retirement savings vehicles, Smith said.
So, Smith got Garcia to be part of the
"He's a very impressive guy" with an impressive path, Smith said. He's "clearly interested in figuring out a way to have a venture designed to solve a problem close to his heart" and with a positive social impact, Smith said.
Garcia's path took him from Tecnológico de Monterrey high school in Juárez, where he took classes in entrepreneurship, math and science, to the
"I always wanted to be an entrepreneur," Garcia said. But when he graduated from
So, he got a technology-related job at Merrill Lynch in
After working for Merrill Lynch three years, a co-worker mentioned he already had saved
"I didn't know what a 401(k) was. I didn't know what matching was," Garcia said.
He had failed to sign up for the optional 401(k) -- a painful lesson at age 25, that stuck with him, he said.
Some people think a lack of education is the reason some people don't invest and save for retirement, he said.
"It's a misconception," Garcia said. "I was an engineer from
"It's more of a cultural thing," he said. He grew up in a middle-class family in
His dad works as a manager for big companies in the maquiladora, or manufacturing, industry in Juárez, and his mom operates two laundromats in Juárez. But they've never had retirement savings accounts, he said. His dad has a small Mexican government-controlled pension.
Finhabits' 10-person loft office in
"He'll make anything work. He is super smart and very driven," Escobar said of Garcia, who remains a close friend. Many "people don't have the culture to save, and he's pretty keen on that."
"Not only has he had the experience of starting companies and running them operationally, he's also the hardest worker I have ever come across in my career," said Scobell, who works in the sales department at Instinet, a high-tech stock trading brokerage firm in
He's using wealth-management methodologies of large institutional investors to create his consumer-friendly model for "a market that's definitely under-served," Scobell said.
Finhabits was tested in
Since the launch, about 14,000 people have applied for Finhabits, and about 1,400 people are actually using it to save and invest, Garcia said in late October.
Some people "are not ready to commit for the long-term plan; some want to do it for a short time to test it," he said.
People can sign up 24 hours a day on the automated system, and the list of clients is growing daily, as is the company's asset base, Garcia said.
When a person signs up, the automated system, developed by a small team of engineers, designers, and financial experts, asks the person personal questions that help Finhabits recommend an investment portfolio to meet that person's retirement or short-term needs, Garcia said.
A lot of other financial apps on the market make the person decide where to invest their money and charge for indivedual stock trades Garcia noted. The trouble is, most people aren't savvy investors, he said.
"We're going to create a portfolio for you, we're going to invest it for you, we're going to re-balance it, and manage the risk every day, and all that is included for
Finhabits' focus is on Hispanic millennials without 401(k)s, but it can be used by anyone at any age, Garcia said.
The app gives clients electronic nudges to help them build a savings habit, he said.
"Finhabits is saying we are on your (consumers') side," Garcia said. "
Garcia wants to eventually open an operations office in
"It helps to be in
But "
Four of Finhabits' 10-person staff are UTEP graduates, and Garcia would like to hire more graduates from UTEP and other area colleges, he said.
"There's a lot of talent from the area, and its bilingual." he said. Putting an office in
___
(c)2017 the El Paso Times (El Paso, Texas)
Visit the El Paso Times (El Paso, Texas) at www.elpasotimes.com
Distributed by Tribune Content Agency, LLC.
The 10 tax planning tips you can’t afford to ignore in an uncertain tax environment
IAT Insurance Group Boosts Efficiency with Duck Creek Suite
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News