A primary concern for military families, pre-deployment, is financial well-being.
That is according to the founding team at Guild, an investing app built for veterans, by veterans.
In light of the Guild’s Veterans Day launch to tackle the mission-critical issue of financial wellness for the military community and first responders, Benzinga spoke with Sean Bonner, Mike Conallen, and Kaj Larsen, who are leaders at the company.
Q: Thanks again for taking the time to speak with Benzinga, today. Care to start off with an introduction?
Bonner: I started off on the floor of the Philadelphia Stock Exchange in the early 90s. Then, I was up on the American Stock Exchange trading options.
Then 9/11 happened. That was a seminal event for me.
One, I ended up taking a job at one of the big banks’ equity derivatives trading desks. Secondly, I eventually received a direct commission in the Navy Reserves as an Intelligence Officer.
After being at Deutsche Bank AG (NYSE:DB) for a number of years, I left during the financial crisis and was fortunate enough to start my own asset manager.
Through that experience, I was still surprised about how poorly retail investors were treated; I ended up merging with a firm I’m still affiliated with, now — Philadelphia Investment Partners — and really started thinking about the retail investing problem.
Conallen: I deployed with SEAL Team 4 as an Intelligence Officer in support of their operations.
I’m a Navy brat. My dad was career Navy, both my grandfathers were Navy, my brother, sister and I were born on military bases, and so the military is really part of who I am.
I’m a lawyer by education, licensed to practice law in a number of states including Pennsylvania, New Jersey and Delaware. I also spent a lot of my career on Capitol Hill, serving as chief of staff to three members of the U.S. Congress, all from Pennsylvania, … and was the deputy CEO for the Delaware River Port Authority.
Larsen: I’m a lieutenant commander in the SEAL Teams. Was actually in SEAL training on 9/11 and was deployed, thereafter.
I have 11 years of total service, give or take a few years between my active and reserve time and when I transitioned off of active duty, I got deeply involved in the veterans philanthropic.
I used my combat pay to start an organization called Misson Continues and served on the board of Team Rubicon.
I spent the next decade in my post-active duty life worrying about the mission and purpose of those who are transitioning out of service.
Thank you for your service! In terms of Guild. How did that happen? Explain the motivations there.
Bonner: I was thinking about better ways for retail investors and consumers to participate in the market.
I was at drill weekend, doing reserve duty — one week in a month, a couple of weeks a year — and surrounded by a group of people completely ignored by the personal wealth industry.
There’s no more deserving population to participate in the American economy than those who have pledged to defend it.
Conallen: Sean came to me with this idea of a better way of investing based on collective intelligence. I was bought in right away because, as an Intelligence Officer, it is pounded into our brains the notion that none of us is smarter than all of us.
Men and women in the military are dedicated to something larger than themselves. And, training is part of what the military is. But, the lack of financial literacy — an understanding of what it really means to build wealth — doesn’t exist.
We felt an obligation to give them the tools, incentives, and training.
Larsen: I saw, over and over again, that as veterans were transitioning out, they were struggling with financial issues. As Conallen mentioned, it’s not just veterans but active duty, as well.
The Department of Defense elevated this to a critical national security issue to make sure that the financial health and readiness of the force are sufficient to not affect readiness.
One other takeaway that I learned from my time in the SEAL Teams is that intelligence drives operations. Intelligence drives action.
That’s essentially what’s happening with this team, here; we’re using the power of Wall Street, where Wall Street meets Military Intelligence, to create this investing platform for veterans.
With Guild, we have a social mission and purpose, as well as a compelling business case.
So, Guild is built by and for veterans to promote financial wellness — both good savings and investing habits — right? How are you accomplishing that mission?
Conallen: It is not just about helping these men and women become more financially literate.
We also believe we’re helping the military meet its mission by helping military members become more secure in their finances. That really led to one of our core value adds of what we’re trying to do here which is to create more financially literate investors.
Larsen: Knowledge is power.
We actually pay our members for financial training. So, we have a curriculum that takes you through investing versus savings. You take a short quiz and, after, we’ll put $5 in your brokerage account. We’re trying to incentivize our members to become more financially literate.
Bonner: We’re using Alpaca for our self-directed trading mobile app.
We really wanted to create that feeling of community. However, we’re talking about money and finances; the last thing we want is a Twitter account attached to your brokerage account.
So, we’re creating an anonymous, objective, data-driven community around investments, and sharing investments, the people can feel confident in the knowledge they are getting from that.
I think transparency is one of the things that people always talk about that is missing from Wall Street.
So, everybody comes on, and you’re anonymized. You can toggle on whether you want to share your username with the community and make your portfolio observable, too. If your portfolio is observable, it will track your performance, only in terms of percentages, in that we’ll see your percentage allocation to any different stock or sector and percentage returns.
We then rank and stack everybody on different time periods — one week, one month — in leaderboards.
You can go on there and see, from top to bottom, who is performing and what they have in their portfolio. With one click, you can buy their portfolio or a sector of their portfolio, or just observe.
Your mission and the ways you’re accomplishing it are unique. What can you tell me about something that’s really intriguing, that you haven’t mentioned yet?
Bonner: How do you give a sort of synopsis of crowdsourced wisdom or collective intelligence?
We’re essentially aggregating everyone’s portfolios, running them through some screens, and then publishing what we call the Guild Portfolio, which is the 30 most popular or frequently appearing stocks in the portfolio. It’s a snapshot of the community in real-time.
The market, on the whole, is generally a form of collective intelligence or crowdsourced wisdom.
It’s about engendering trust in the rest of our community.
You stress the importance of education. Talk to me more about your initiatives there.
Bonner: Under the Knowledge tab of our platform, we have three basic buckets.
One is just the basics of investing.
Then we’ve got another tab that’s just military-specific money issues. For instance, when you get your military pay statements — Leave and Earnings Statements — it’s like a foreign language.
We’re helping people decipher that and how to get ready for deployment, retirement, marriage in the military, and so on.
The third tab is on the basics of our platform and how collective intelligence works.
Larsen: We’re helping people become smarter, more sophisticated investors.
We have this soft mentorship component which includes the leaderboard and the Guild portfolio, which allows people to go in and do deep research.
Conallen: We have greater trust in our military brothers and sisters than other people on the street. We’re using that ability to go [better] talk to our brother and sisters because we speak their language.
We can explain to them and they can trust us more than they can other service providers.
Talk to me about how some recent trends may bolster the work you’re trying to accomplish.
Bonner: The financial crisis we’ve seen is still a big hangover for the millennials and Generation Z. I think that’s part of why you’re seeing self-directed take-off.
With that, though, we don’t want to be DraftKings. We try to put up some guardrails and nudge them towards better behavior.
A good example of this is our award ribbons; we try to reward users if they do something we see as good behavior. The most basic is the diversification ribbon. If you have a portfolio, and you bought more than 10 stocks, you get that ribbon.
We took the Army Good Conduct Medal as inspiration for the diversification ribbon.
What are the next steps now that you’ve curated the waitlist and soft-launched the app? There’s a ton of unique functions, such as being able to create hashtags and bolster engagement around the platform. What else are you excited about?
Bonner: The app is available on the Apple App Store and Google Play.
Six months to a year from now, or more, Guild becomes not just a broker but a full financial services company.
There are a lot of needs for a lot of people in the military — the military affinity group we refer to it as — and even other groups such as police, fire, and first responders.
Although we are focused on the military community, we’re not exclusive. It’s not like you have to do some kind of verification to come on board. Anyone is welcome to join.
Conallen: We’re focused on creating content and educating our users, too.
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