Fintech Spotlight: How To Build A DIY Robo-Advisor Using Passiv

Benzinga will be holding its annual Benzinga Global Fintech Awards, a day of dealmaking, networking, and recognition in the financial technology space, on Nov. 11, 2021.

The event will award Benzinga Listmakers, those top companies part of Benzinga’s Global Fintech Index, for their accomplishments innovating, as well as merging the best of finance and technology.

In recognition of those disruptive innovators creating positive and diverse change within the financial services space, Benzinga spoke with Brendan Lee Young, CEO at Passiv.

About: In light of the commission-free trading revolution and COVID-19 coronavirus pandemic, inexperienced participants flooded the market, actively speculating with the use of short-term, risky strategies.

The problem with risky strategies: investors are quickly worn out when things turn bad.

More and more, as DIY investors go back to work and become less aggressively involved in the market, the demand for long-term investment tools has risen. Founded in 2017, Passiv is one fintech provider benefitting from this change in trend.

The company automates wealth for global self-directed investors, turning brokerage accounts into personalized robo-advisors. Users can create and manage all their investments, from a single dashboard, across numerous brokerage providers like Questrade, Interactive Brokers, Tradier, Alpaca, TD Ameritrade, Zerodha, Wealthica, Unocoin, Kraken and others.

The fintech was founded out of the need to track and manage low-cost ETFs with ease.

“I was trying to become financially independent and got into DIY investing,” the CEO said. “I was following a handful of ETFs and invested in them with my online broker. It was a pain to use spreadsheets to help me figure out what trades I needed to place at my online broker, to keep my portfolio balanced.”

Fast forward, after meeting his co-founder Brendan Wood at a house party, Lee Young learned that many of the time-consuming portfolio management tasks he’d normally engage in could be automated.

The two then built an application based on their broker’s API making it easier to trade and keep their portfolios balanced.

Core Product: Passiv is a secure way for DIY investors to streamline their portfolio management process.

Through API connections, Passiv allows users to log into their brokerage, build portfolios, set target asset allocations, and execute trades that keep portfolios balanced. Additionally offered is a reporting functionality that provides information on contributions and withdrawals, investment growth, dividend analysis, and more.

“Online broker APIs are primed to disrupt wealth management because you can basically build your own personalized robo-advisor and not have to pay a fee to someone if you know what you want to invest in,” the CEO said in a discussion on Passiv applications. “We’re basically making DIY investing, for retirement, simple to follow. You see the trades you need to place and, if you want, in one click, all of your trades are executed across multiple platforms.”

Through Passiv, users can learn through investment courses provided in partnership with Compound Confidence, research, invest, and rebalance their entire household’s wealth in products like low-cost ETFs.

The platform comes in two packages: Community User and Elite Member.

The Community User package is free and automates calculations, provides cash and dividend notifications, multi-account portfolios, multiple brokerage logins, and keeps stock picks separate. The $99 Elite Member package, which is free for Questrade clients, does all that the Community User does, in addition to allowing for one-click trades, advanced currency handling, grouping assets into classes to rebalance, and the ability to prioritize the accounts your assets are bought and sold in.

“The main feature users love is having the ability to place trades with one click.”

Innovation Outlook: “We just crossed $1 billion in assets managed with our software," said Lee Young. "That's a huge sign of trust for us.”

In light of the asset milestone validating the market’s need for DIY portfolio management tools, Passiv is building support for cryptocurrency exchanges, making it easy to invest and manage wealth across emerging asset classes.

“I think that the future for us is going to involve not just supporting traditional brokers that have open APIs, but also crypto exchanges that have open APIs, as well,” said Lee Young. “The next generation of investors is not just investing in traditional assets at traditional brokers. They’re investing in alternative assets with new brokers.”

Going forward, the team of 11 has hopes to position itself as the go-to fintech for personalized, self-built robo-advisors.

“It’s all about building a platform to help people build long-term wealth by following passive investing,” Lee Young said.

To sign up for a free year of Passiv Elite, click here.