Facet Wealth, a start-up RIA which serves the mass affluent, has secured a $33 million investment led by private equity firm Warburg Pincus.
Based in Baltimore, Md., Facet buys books of smaller clients from other RIAs and offers them a low-cost service via partially digital advice, placing them in model portfolios populated by low-cost ETFs from Vanguard, Charles Schwab and iShares.
‘We’re going to utilize this $33 million investment to realize our vision,’ Facet Wealth CFO Lisa Rapuano said. ‘We need to acquire clients, we need to publicize Facet to make clients know who we are and we also need to continue to build out the things we’ve already put in place. We need to continue to improve the proprietary technology that we have that gives our advisors an incredible set of tools to serve these clients incredibly efficiently.’
The firm currently manages around $23 million in assets after launching in 2016. So far, Facet has amassed around 200 clients on its platform and is in the process of moving over another 300 clients onto the platform from their RIA partner firms.
Though the firm prides itself on its tech stack, Facet Wealth insists it is not a robo-advisor.
‘Another big differentiator is that we are full planning,’ Rapuano said. ‘We are full planning, high-touch. There’s no limit on how many times you can call us. It’s not a robo. Our technology is for our use, not yours. We’re not saying you have to do this yourself. This is a full human, dedicated CFP professional relationship, just like those million-dollar plus RIAs give you, but really structured and delivered for people under $500,000.’
Warburg Pincus has a track record of investing in the RIA industry. The firm bought a majority stake in The Mutual Fund Store in 2011, a $7.4 billion RIA that was later acquired by Financial Engines. Warburg Pincus will join venture capital firm Slow Investors as a financial backer of Facet Wealth.
‘We should be, a year from now, four to five times where we are now, at least,’ Rapuano said of the firm’s goals for gathering clients. ‘My big goal, because I work with the advisors a lot, is to become well-known in the industry as a problem solver and a good partner.’