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MailTribune.com
  • Free, financial 'GPS' service aims to make planning ... fun?

  • Using the online money management platform FlexScore is like driving a car, said Jason Gordo, chief executive and co-founder.
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  • Using the online money management platform FlexScore is like driving a car, said Jason Gordo, chief executive and co-founder.
    "We're like the GPS for your financial life," Gordo said. "You've told us where you want to go, the goals that you want to accomplish. And we give you in a very simple, easy-to-understand financial health scoring system, a tool that tells you when to turn left, when to turn right and how fast to drive to get to your final destination."
    FlexScore is free for consumers, as it's funded by financial service providers who get leads from the service or advisers who license the technology for their clients.
    The online tools try to make budgeting fun by giving users a score, allowing them to earn points by taking steps to improve that number and giving them a gauge of how they're performing compared to their peer group. While financial advisers who offer the platform to their clients can't tinker with the algorithm that suggests what steps should be taken, they can shape the point-earning "action steps" so that they point to their own business.
    "There's a natural competitiveness in people," said Mike Capelle, senior vice president of platform and technology at United Capital Financial Advisers based in Newport Beach, Calif. His firm is one of the first advisers to license the platform. "We're looking to integrate (FlexScore) into our client experience and help us provide a more engaging experience."
    Gordo, who's based in San Francisco and has a background in investment management, spoke with the Orange County Register about his new platform, which rolled out of beta testing at the end of April.
    Question: How does FlexScore work?
    Answer: It's a 1,000-point scoring system based on the user's specific goals, wants, desires and abilities. We break it into two sections: building the nest and funding the nest. We've built this advice system called action steps. Based on what you told us in the goals screen, this is what you need to focus on with your FlexScore.
    If I click on "diversify investments," it's going to tell me a little bit about my risk profile given my assets, debts and goals. And I get points for taking positive steps forward in my financial life based on what I hope to accomplish.
    Q: Do the action steps guide consumers to products that they need to use in order to satisfy those actions?
    A: So there's three revenue models for our company. The first is these action steps that are fulfilled by a national provider of services. Think of a big insurance company, mortgage company, big credit card company or bank. (For example, if the system recommends you buy life insurance, it displays a suggested provider.)
    The second way we make money is where advisers license the technology on a monthly basis. The action steps delivered to their clients are tied to that adviser's products and services, and they're also available to retail customers of FlexScore.
    And the third way we make money is through licensing agreements with big banks, brokers, credit card companies, credit unions, where they use FlexScore technology as a digital delivery platform of financial services and advice to their consumers.
    Q: At a recent forum on consumer financial services innovation you spoke on a panel about financial fitness through smart data. What were some interesting issues that came up?
    A: The industry needs to do a much better job helping people become more financially fit. Financial literacy is lacking in this country. We spend millions of dollars on college athletics. We spend no money preparing our youth for the real world. I was an athlete as a youth. By the time I was 22, I was done being an athlete. But since the time I was 16 years old, I've been a consumer.
    People spent a lot of money preparing me to be a youth athlete, but they spent no money, no time, paid no attention to helping me figure out this world of finance. Wouldn't it be great if the banking, brokerage, finance industry came together, built great learning modules and then went into the school systems and delivered those over a semester or a yearlong course on personal finance? This is why you invest in real estate or stocks or bonds. This is why when you get a credit card, you pay it off at the end of the month. And this is the effect of interest on your life. Get them on the right track in the beginning instead of trying to help them figure out how to get on track after they've messed up.
    Q: Is there anything people find surprising when they use FlexScore?
    A: The amount of money it takes to get on solid financial footing. The American dream to buy a home is out of reach for most Americans. The dream of sending your kids to college and paying for it is not realistic for the average American. The dream of early retirement — 46 percent of our users have the goal of wanting to retire before they're 60 years old.
    People have unrealistic expectations of their financial abilities. So we're trying to bring clarity to their thoughts.
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