Hi guys, welcome to the FinTech coffee break. I’m your host Isabelle Castro, and today I shared my coffee break with Manning Field, CEO of Follow.
Follow is an investment platform that connects the movements of finance-focused influencers with individual investors. Users can subscribe to creators’ financial feeds, setting up portfolios that automatically mimic their actions.
We spoke about their approach and the effect social media has had on investing.
Isabelle Castro – Hi, Manning. How are you? Welcome to the show.
Manning Field – Good morning. Very nice to meet you. And thank you for having me.
Isabelle – It’s good. It’s good. I’m really happy to have you here. So what gets you up in the morning?
Manning – outside of podcasts. What gets me up in the morning is usually ideas. I’m a strong believer in the subconscious and using your subconscious. And so usually, things get resolved sometime in the middle of the night, and I wake up with ideas.
Isabelle – Nice, nice, that’s a good reason to wake up. What brought you to founding follow?
Manning – You know, I’ve spent the last 25 years of my professional life making products in financial services. I first started at JPMorgan and then spent nearly 20 years there, and then moved on to help grow Acorns. I was the CEO there for six years. And just, you know, the idea of making products and the idea of helping people do the right thing with their money on something that’s that was really motivating to me.
As I looked through the eyes of the five teenagers of my life, three of them are my kids, and two of them are my girlfriend’s kids, just seeing how they engage with the world and see how they think about money, and how they approach the topic of doing the right thing with their money. It’s just very different than the way in which I grew up.
So the idea to create a product that actually helps them do the right thing and helps them inspire and connect with them in a way that works within their environment is what inspired me to collaborate with my co-founders and create Follow.
Isabelle – Okay, okay, this now is fitting into place because you guys focus on social investing, right? So maybe, to begin with, give me a little overview of what is social investing.
Manning – Yeah, sure. Well, social investing, I think is an idea in financial services that’s been out there, I think, even before social networks. So it’s been out there for quite some time. But I think it’s been very difficult to execute against the idea. And there’s been many, I think, well-intentioned and high-quality companies that have attempted to do this.
A lot of things in tech and fintech are really just the digitization of analog things. And the conversations that you have Thanksgiving or around Christmas time are at a Super Bowl party with your friends about money and what are you doing with your money.
I think the opportunity to connect those conversations to action and actually have that happen in the world of investing and money has existed for a long time because those conversations have always existed. So what no one’s ever figured out is how do you actually turn that into a digital product and an experience that works at scale? And so what we’re trying to do here follow is take that analog idea, and bring it to the digital world and do it in a way that is very consistent with how particular young people interact with the world today.
Isabelle – Okay. And is this mainly using kind of social media? Or how does this work?
Manning – Yeah, so the product that we have here – Follow is a platform, think about think of it as a marketplace, that connects kind of well-intentioned, and thought for, we call them leaders on our platform. So these are social media influencers. So their presence is very big, and they’ve got large audiences and social media across platforms like YouTube and Tiktok, and Twitter and Instagram, and so forth, and Discord. And it allows them to connect to people who want to follow their ideas and engage with them on the content level.
A part of our product is Substack or Patreon. The other part of our product is actually we’re an investment advisor that’s independent of all of these publishers in these leaders. But what we create with our own investment advisors, we create accounts that mimic the activities that these influencers actually have in their own personal trading accounts. And what that allows a person to do on our platform, who subscribes to the content, they also open up an investment advisory account with us, which you can do is to automatically sync those moves that mimic those moves in an influencer’s account.
What that allows you to do is allows you to kind of stay in sync, understand how they think about money through their publications, and then also stay in sync with the moves that they make in their own portfolios. And so that is the power of what we’ve made. And one of the key things that has helped enable this to happen is the fact that we’re an investment advisor and the fact that we can do this automatically. And that’s the missing piece. That’s existed in kind of all of the prior attempts here to make social investing happen.
Isabelle – Okay. Okay. And so, what are the benefits of social investing? Why do we need this as a kind of investing strategy?
Manning – Right now, 50% of Americans don’t invest in the stock market. And you have to ask yourself why that is. And the main obstacle is really confidence in myself, I don’t know what to do with my money, I don’t know where to start, I don’t know, I don’t think I’m gonna walk into Morgan Stanley office and set up an account there because that doesn’t feel very accessible to me.
So through personal relationships, and through people that look and sound like me, that come from my same background, and maybe that inspire me on platforms, like social media, gives really access an entree to people who are not doing the right thing with their money, and who don’t know exactly what to do with their money.
I think it’s also compounded by the moment that we’re in with respect to the markets and respect to trust in institutions. You know we’re four months away from FTX completely blowing up and stealing people’s money. We’ve, you know, the markets have had historically been up into the right for, for most young people, and now they’re not. And they might have opened up their own self-directed accounts on platforms, and they probably have lost money, and they don’t know what to do.
So what we’re creating as a platform for people through the investment advisory that we have is actually to help them start to think about doing the right things. This isn’t about like, some quick, like, get 3,000% returns. I mean, that’s, that’s not the platform we’re creating, that’s not the people we bring on to our platform. And that’s not the promise that we make, it’s really about through the lens of diverse perspectives. How can I create a diversified investment strategy for myself? And how can I automate that? So we believe the access point through these people and through social media is a great way to reach people that aren’t doing this themselves already.
Isabelle – Okay. Yeah. A lot of people that are taught to just in day-to-day, say that they don’t know where to start with investing. So I can see how that really kind of appeals to anyone that’s just starting out, right? There must be challenges with this. What would you say are the biggest challenges?
Manning – The biggest challenge, so there are two, you want to make sure that the people that you bring onto the platform, and this is on the influencer slash publisher side, you just want to make sure that they’re there. They’re respectful of their audience,they’re community oriented, and they have good takes.
Think about that as a quality concern. So just make sure we’re putting the best set of options in front of a consumer so they can choose who works best for them. So that’s, that’s challenge number one. And we’ve got techniques that we use to manage that challenge. The other challenge is how to do this in a way that is consistent with the law and consistent with SEC regulations. That probably is a more significant challenge than that than the quality challenge. But we’ve worked really, really hard to design a structure that works within the rules established and has the right controls and has all of the things that makes it not only legal and compliant but also makes it very simple for both the end user and the customer. Okay, that’s the hard part.
Isabelle – Yeah, well, it sounds like you are on it to kind of rise up to that challenge. You did mention that before. It was It has been difficult to bring this kind of analog social investing onto the digital platform. Why why is it happening now? And why is a good time to focus on it now? What do you think brings?
Manning – I think it’s the combination of the two moments in time why now is right for this.
The first one is basically you’ve seen this explosion through kind of the pandemic that we’ve just come through and young people’s interest in the category. You’ve seen an explosion in just the audience reach of these influencers. So the aggregate audience reach across all the top 10 influencers across all the top 10 platforms. This is something they’ve heard 53 million people So it’s very large, three or four years ago, it wasn’t nearly that large. So you’ve seen just an explosion in the voices and the power of those voices and the attention that they command and the way in which they engage with young people. So that’s one reason why.
The second one is, this probably is a less interesting idea when every day the stock market goes up. Because of the idea of understanding what’s happening, you’re not really confronted with that question as a consumer, because everything everyday is up. And if you study the history of markets, that’s not how this, that’s not how it works, it just, we were at a moment in time, over the last three or four years, where that just happened to be true. And now we’re when the markets are more choppy, and we’re going through, activity that the Fed is doing what’s happening with inflation, there was a little bit more uncertain. And you see that every day in the swings in the market. And so how to help someone navigate those swings, and how to think a little bit more long term is where a platform like ours can really help people identify with a set of perspectives that might help them more confidently navigate the future.
Isabelle – Yeah, because I mean, when crypto was on a high, I did talk to quite a few people who kind of just follow the movements of their favorite investors, right? What what do you feel like a platform like follow will give these people that maybe they don’t have just from following the people on social media or whatever?
Manning – Well, I think it’s actually aligning ideas and perspectives with action. And, you know, the product vision that we have for Follow is that portfolios of the future are actually portfolios of people, and not portfolios of tickers and asset classes. And, you know, those very complex mathematical things like Sharpe ratios. I mean we do all of that, but we try to abstract that away, because that actually feeds into the lack of accessibility for the everyday investor. You know, that’s part of our job as the investment advisor to actually take that work on. But our job is to first make sure in the marketplace, we have as diverse of a set of perspectives as possible, around in diversity in every definition of Word, including how they think about investing. And then as an advisor, we do things like suitability, because we haven’t proved through shared responsibility for the client. And it’s like, how do we help them discover who might be right for them, and likely, that is not just a single individual, but it’s actually the combination of individuals like portfolios of the future, or portfolios of people, because also that human connection, in digital product, and with particularly with money is actually quite important.
So, it’s really about kind of this portfolio of people that we will help you assemble, and using the tried and true principles of diversification and helping people understand that it’s actually quite, quite core to the product experience we’re creating. So if you actually come into our product, what you’ll see is a rope. And it’s actually that we communicate the performance of your portfolio as a client through a rope.
What that is a metaphor for actually, kind of using the threads of the rope to communicate the strength of relative strength and diversity. Because the more threads you have, the stronger and more durable that rope is, and it can injure the ups and downs, because every day it’s going to be ups and downs and, and conditioning people to understand that and to understand the principles of diversification and long term thinking is core to what it is that we do. So aligning them with perspectives and portfolios inside of our advisor. I mean, that is the core. There’s the core advisory work that we do for our clients.
Isabelle – Okay. And last year, there were various influencers, social media influencers, then got fined for providing kind of financial advice online or promoting certain assets. Why do you think this happened? And how do you guys find the balance, like onboarding, with the people that you follow? And all of that?
Manning – Yeah, so so we vet our influencers, you know, to address that first problem earlier on in your discussion or on quality, so we’ve had them, and we also have other controls that would protect us from participating in some of those activities that were found by the SEC and those you know, those criminals were fined. And so our screening process definitely because basically they came to us and we rejected those folks. But, also we don’t trade in securities. A lot of his activities in like low, like with a companion sheet. So very low market cap, high volatility, low liquidity stocks, they’re not even available. So we have a restricted stock list on our portfolio.
Basically think of it as like the Russell 3000. and above. So, so we are really focused on quality. And we also don’t enable things on our platform like pattern day trading and activities like that. So, so we screen out any influencers that perform that kind of activity, and then and then we ask for things like brokerage statements, and we get access to their other accounts that are the ones associated with us because part of our monitoring process, just to make sure, we’re being very sensitive to anything with respect to market manipulation. Nothing’s proof on this one. But we’ve got lots of controls in place, and we take that vigilance very seriously.
Isabelle – Yeah, it sounds like it! Looking at the current wealth creation industry. Where do you think it’s headed in the next ten years? And what do you guys hope to achieve?
Manning – Um, you know, I’m an optimist. It’s my natural resting place. And so I’m very bullish on the opportunity to continue to get young people and retail investors more involved. You know, and I think, I think the entire industry, both the incumbents and startups like the one that I have the good fortune to lead, are going to continue to push on that, you know, I think when you combine that with a massive generational wealth transfer, that’s going to happen over the next 10 or 15 years, I think there’s gonna be real pressure on the traditional industry to hold those assets. Because the decisions parents and grandparents make with their money are going to be different than the young people that inherit those assets.
So I think, you know, what platforms like ours and others out there continue to challenge is how to make the user experience really top-notch. How to make it very clear how to not make it complicated, and how to keep fees down. I mean, I think those are the things that are really going to put pressure on the incumbents, particularly, as the young people start to take control of money. That’s, traditionally been locked up in the bigger institutions.
Isabelle – You make me very excited about the future.
Manning – I’m very excited about the future. I see it through the eyes of my kids. And I, you know, I, part of this is you asked me what gets me up in the morning is like, you know, designing them for them?
Isabelle – Well, it’s a really good motivation. And I’m glad that there are businesses like yours that are making it more accessible because, I mean, when I was growing up, it definitely wasn’t accessible. But my brother, who’s 12 years younger, is now already thinking about this kind of thing. So it’s great. So, I’ve got two more questions. A piece of advice that you have been given that you would give to other people.
Manning – Um, with respect to investing, just get started. Just like, just get started. It doesn’t even matter what that first step is, but that’s the most important one.
Isabelle – Nice. Okay, I’m gonna get started tomorrow. And your final question, which is the curveball question, which I chose at random before coming on. If you had to choose a theme tune for your life? What would it be?
Manning – Oh, um, I will survive.
Isabelle – I will survive. Nice. Okay, cool. I’m getting some really like good answers to these kinds of questions. I like that. Thank you for that. And well, how can people get a hold of you? How can they follow you? How can they follow, Follow?
Manning – Oh, gosh, Twitter’s probably the best way. Or my LinkedIn incident. It’s really complicated, and it’s @manningfield on Twitter and Manning Field on LinkedIn, so I was probably the two best places to track me down.
Isabelle – Okay, perfect. Well, thank you so much for your time. It’s I’ve really enjoyed having you on the show. Thank you. Have a good rest of your day. All right.
Manning – Appreciate you have a good one.
Isabelle – As always, you can reach out and chat with me on my personal LinkedIn or Twitter at @IZYcastrowrites. But for access to great daily content, check out Fintech Nexus on LinkedIn, Twitter, Facebook, or Instagram. You can also sign up for our daily newsletter, bringing news straight to your inbox.
For more fintech podcast fun, check out the website, where you can find more fascinating conversations hosted by Peter Renton and Todd Anderson.
That’s it from me. Until next time, enjoy your downtime.
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