249 - Building Financial Literacy: Educating Parents and Children Alike with FutureMoney's Philip Barrar and Dave Fortin

Welcome to Listening with Leaders. I'm Doug Noll, lawyer turned peacemaker. I teach executive leaders how to listen to emotions rather than words so that they can become the leaders everyone wants to follow. And I teach those same leaders how to be authentically present, available, and connected to their families despite being insanely busy. I have learned that we are 98% emotional and only 2% rational. Learning how to listen to emotions is, in my experience, the foundational skill of life. Stick around to the end of the show and I'll reveal how you can be on our next guest in 15 to 20 minutes. So let's get started.

Phil Barrar and Dave Fortin, welcome to Listening with Leaders. You guys have a company that's pretty new. Uh, it's called Future Money and it can be found at futuremoney.co and it has to do with helping parents invest money to create generational wealth for their kids. Did I get that right?

You absolutely did. We're, we're in the game of building financially inclusive products and trying to make an impact in people's lives. And we think the best way of doing that is by getting people started early. So we've created this mobile app to help, uh, parents.

So, well, you all know about the rule of compound interest, and if you can compound your investments over a long period of time, you can make a lot of money. And that's the secret.

The trick is actually something that we talk about a lot is we take, I think, examples to make it, you know, relevant for people and easy to understand. If when your child is born, you put $10 a week aside from the age of 0 to 18, and you never put another dollar in after that, by the time that child reaches their retirement age, that could be a million-dollar-plus head start on their retirement. And that's just assuming the 8 to 10% historical returns of the S&P 500. %. So we're not talking about anything out of the norm there. That's really just what the historical rates of, of the US equity markets have been.

So tell me a little bit about your backstories. Dave, why don't you tell us, start, tell us a little bit about your background.

Sure. So I'm born and raised in, in Montreal in Canada, graduated from McGill with a degree in finance, started working for a fairly traditional asset management firm, worked my way up there from an analyst to portfolio manager. Eventually entering the C-suite there. That's when actually I met Phil in about 2015. So his, he had the idea for a previous company that we actually worked on together and me in my capacity at that firm and him in his capacity with that startup, we started working together on something that became called Moka, which was the third largest round-up to invest app globally. So we operated in Canada and then we ended up expanding into Europe as well. So we worked together there from 2015 to 2021 when we ultimately sold that company to a publicly traded company. Both stuck around with the acquirer for a few years. Phil left a little bit earlier than I to get started with Future Money, and I joined him shortly thereafter.

What about you? What's your story?

My story, where do I start? Originally born in the Greater Boston area, I moved up to Montreal back in 2008 to go to university. I just found that the cost of living and the cost of education in Canada was too good of a deal to pass up. Ended up falling in love with the city afterwards and stayed in Montreal for about 13 years. After university, I went straight into entrepreneurship. So I started my first company doing patient care reporting for ski patrollers. Quickly learned the difference between self-employment and building a business. It was a small total addressable market. It's a slow sales cycle, a non-revenue generator, but we built a fantastic product that had a, a massive impact on people's lives. Ultimately ended up building my second company, Restaurant Discounts During Off-Peak Hours, sold that one back in 2015, and then decided that I wanted to dedicate my career to building financially inclusive solutions. So as an American living in Canada, I had access to products that my Canadian peer group didn't have access to.. And I went from being a broke student to a bootstrapped entrepreneur. I became really good at personal finance management. I decided to jump into the space and I founded the company that Dave was talking about, Moka, to help people start saving and investing through the small action of taking spare change and putting it into an investment account. We saw a great deal of success there, close to a million users on the product before we ended up selling back in 2021 and then ended up as chief innovation officer at a publicly traded company, completely different pace than it would be building early-stage mission-led fintech products. It was a great experience understanding the different dynamics of publicly traded companies versus early-stage venture-backed businesses, and then decided to leave my earnout early to start this new company that we're talking about here today.

Wow.

When you left your earnout early, that means you left money on the table?

We could put it that way, but I think the opportunity at hand is a really unique one. And I, I think it's a good opportunity regardless.

How long has Future Money been up and operational?

Yeah, we've been up and operational. I would say we started on the idea February 2023, so it's been just over a year that we've been working on the concept, and we've been live in market for, for just under 6 months now. We're taking the same playbook that we, we utilized to build a successful fintech in another market. Um, we're, we're using that same playbook, uh, to accelerate here. So last time it took us 2 years and over $1 million this time and took us 6 months and half a million dollars to be able to, to do it. That experience definitely counts for something.

Absolutely. What does it get you guys up in the morning to go to work? You're living, what, 200 miles apart?

What is it that gets you up and motivated to do this work?

The first thing that gets me up in the morning is my kids. It applies in more ways than one. Yes, it's them I'm hearing from, and that's who wakes me up to, to take care of them first thing in the morning. But with our mission with Future Money, we're, we're trying to help parents out there, it can be confusing to know where to start as a parent. I feel that, that drive to do something to put my kids on the right path in terms of their education, in terms of making sure that they're, that they're financially stable, that they're going to have a good future. I feel that pressure to provide for them. And they're only 10 months old. A lot of those education considerations are further down the road. But our approach with Future Money, I think, is one that's really powerful. Investing can be complicated for people. We're trying to make it really simple. We have a lot of experience with that, making it easy to use, making it accessible. And we hope that by doing that, we lower the barriers of entry, get more people started earlier. And the beauty of it is by starting earlier, you have to put a lot less money aside to achieve the same end result. So it's really— I'm motivated by getting our message out there. About the power of starting early with investing?

I have to hand it to Dave. He juggles two twins at 10 months old, plus a startup without breaking a sweat. So, um, he's a superhuman. But just to echo what Dave is saying, we're the first generation in history to be financially worse off than our parents' generation. So if you think about it, the starting line has moved back for an entire generation. Living the American dream, buying your own home, going to school, moving out of your parents' house has become more and more difficult for all of us.. And, and when we think about that, certain demographics have even more difficult time than others. 67% of Black families not investing, 70% of Latino families not investing. At the end of the day, what Dave and I are trying to do is level the playing field. We want to make it easy and accessible for everyone to be able to, to build that generational wealth. And the, the best hack to doing that is this compound interest and starting early. And if you can start pre-birth, even better. So we're— that's making a difference and, and righting a wrong that's happened in the entire society today, I think is, is really important. And that being it, living the American dream is more and more difficult, and we think that we can make it more accessible for all.

How do you—

how does your platform work?

Yeah, we have a mobile application, um, that's available on the Google Play and Apple App Store. You go through about a 3-minute signup process. It's very simple. You can be sitting in line at Starbucks, and by the time you pay for your coffee, you've signed up for your investment account for your kids. What we do is we have a modest recurring deposit that parents can set up. They can visualize the impact it would have based off of various rates of return, and then we do a pre-authorized debit once a week to be able to fund these accounts. Again, this really modest $5, $10, $15 deposits could be life-changing money measured in the millions later on. We offer a couple of different accounts. We offer a taxable brokerage account, which is comparative— comparable to UTMA, UGMA, with a couple reasons why we're better on that one. We offer 529 education accounts, and then we offer our proprietary Junior Roth IRA. This is the account that we invest— invented, which essentially under the hood is a 529 that rolls over to a Roth IRA at the age of 18. So those are the 3 main products that a parent could utilize, and automated for them through our platform.

And then are you guys providing investment portfolio?

Exactly. So, so we have, we have an RIA, a registered investment advisor. We're registered with the SEC. And so we in-house have the ability to select investments for clients during that 3-minute onboarding process that Phil was mentioning. You're of course responding to basic information and name, address, date of birth, things of that nature that are needed to, to open the file. Then we ask some questions. For example, what is your approach to investing? Are you looking to really minimize your losses? Are you willing to, uh, accept a little bit more risk in order to have potentially higher investment returns? How would you react in terms of a, a market downturn to gauge what your actual risk tolerance is as an individual? And then we combine that information with information about the actual goals that you're setting. So we're a goals-based investing platform. And what that means is when, when you set up your account, you can set up multiple different goals. So you'll start with one and then you can set up others. So if you're saving for a child, for example, that might be a 60-year time horizon that, that exists on that because you're saving for a nest egg for ultimately what'll be their retirement or if they have to dip into it earlier. But that's a very long-term time horizon versus you might also want to do a family vacation to Disney in 5 years. And so that'll be in a separate bucket, in a separate account. And the risk profile of those will be different. A lot less risk is gonna be taken when you have a shorter time horizon and more can be taken when you can ride out the cycles of the market for the, the longer term investing. So essentially we take all that information that's provided through the app during signup, and then we use that to assign an investment model. And then that model, investment model entails a certain allocation to stocks, bonds, et cetera. And then we fully implement that. So All you need to take care of is deciding how much do you want to put in per week or per month, and then we're gonna fully automate the investment of that. You don't need to go in and do any buying or selling or deciding what securities to pick or anything like that.

I take it the app will have the portfolio values and show the breakdowns, and so you can follow what's going on in the accounts just by using the app.

Exactly. You can see a full breakdown of everything that you own in your account and the performance over time. All that.

And I figured the way that you guys are making money on this is you're aggregating all this money into these different investment buckets. What kind of a fee do you charge for that?

Yeah, we try to think that we have a very inclusive fee. We charge a small SaaS fee of $48 per year after a 30-day free trial. There's income-based discounts. If you make less than $50,000 a year, there's a 50% discount. Less than $30,000 a year, there's a 100% discount. And then any assets over $20,000, we charge a 25 basis point management fee on. So again, one of the lowest cost fees in the market to be people to manage these funds?

Pretty low. Charging what? Anywhere from 1% to 3%, depending upon the size of the portfolio.

We're trying to make it as accessible as possible. And in our minds, if we can save you more than an hour's worth of time, then the payback period should be immediate to use our platform. So we're making it as much of a no-brainer as possible.

So what is it, what is it that's unique about you guys that you bring to this project that's making it successful?

That's a great question.

Individual uniqueness, not some broad thing.

I think it's our approach to building companies. We are very customer-centric in the way that we're looking at solving a problem. We're in the target demographic ourselves as well, but we're building a solution that we want to have and that we are being informed by others that they want to have as well. So there's a large amount of customer discovery that we do in everything that we're looking at. We're leveraging the experience that we've had building and scaling products loved by millions, and then we're building an audience or a group of advisors around us that built products that are loved by millions as well, and leveraging their learnings and their insights. I think the, the power of the team, the experience, and our unique perspective is helping us get to market faster.

I just wanted to touch on maybe the team aspect of that. Phil and I being co-founders of the, of this business, we definitely have our each our areas of expertise and talents, and there is complementary nature to that. Phil is, I would say, much more visionary. He's stronger. He has a very strong product vision. He's really good at, at understanding marketing and how, how to get a message out, how to convey it in an interesting way. I think he's got a, a better eye for design than I do, which is really important in terms of our, you know, website, our app, all of that, making it easy to understand, making it enjoyable to use. My expertise coming more from the traditional finance background, I'm I've got the background in understanding the plumbing of finance, for lack of a better word, understanding the investment side, how all that works, and then getting really deep into the regulatory side of things. Obviously, in a business like ours where you're managing other people's money, it's heavily regulated. You need to understand these things. It's important that these regulations exist to protect people, and you need to be able to understand how to comply with your obligations and still be able to do business and understand what that path forward is. We work well together. A lot of the time it's kind of Phil coming up with more of the ideas and then maybe I'm adding in some of the details of the how to get there.

So are you guys completely remote?

We are a completely remote team and we're in multiple countries as well, but we do take time to make sure we're doing offsite debriefing in person to build in those relationships. We find if you have a solid foundation, you're able to work very effectively. Through, through remote environments.

So this show is called Listening with Leaders. I was telling Dave before you came on, Phil, that I'm a lawyer turned peacemaker. And I practiced, I was a civil trial lawyer for 22 years and then went back to school, got my master's degree in peacemaking and conflict studies. And in 2000, left the practice of law to help people resolve conflict. And today what I do is help people prevent conflict and The promise I make to my clients is you'll never have a fight or argument again with anybody. Once you master my skills, it's your spouse, your kids, anybody. It doesn't matter. You just completely eliminate fights and arguments. And the key to it is learning how to listen. And I'm just curious about how important listening has been in both of your careers.

Dave, do you wanna go first or you want me to go first?

No, just a bad joke. So I'm a dad now, so I get to make dad jokes, right? It's of course something that's, that I've always found to be really important. In the context that we have right now, we are a very small team and we don't have a large managerial structure. We don't have either of us a lot of people reporting to us, but certainly in the past and in our previous organization where we had, I don't know, at one point Phil, 100 people, something like that, close to it, it's really important to be able to get Everybody aligned on, on the same, on the same path. And you can do a lot of communicating outbound about what the vision is and where we're going and all that is important, but it's just as important to listen to the feedback that you're getting from the people in your organization about what their pain points are, you know, in doing their day to day, and you'll uncover a lot. And in our case now, it's really a lot about listening to our end users, right? Our clients of our, of our business. When they're facing an issue, that's something that's critically important for us to, to address and to prioritize. So it's something where I don't think either of us view it as we're just going to plow ahead with what our preconceived notions are. We really want to be hearing from our community and those who are using Future Money and who are interested in Future Money to understand how we can really build this to be something that's even more useful and more valuable to them.

Doug, I think you, you talk a lot about empathetic leadership and the, the ability to understand the needs of others and being aware of their feelings and thoughts. And, and for us, we find that listening is, is the first step to doing all of that. We have to understand where people are coming from, aligning their incentives and making sure that, of Once motivations are pointed in the right direction, we do a lot of that internally with the team by aligning the mission. For us, it's why are we working, what we're working, and what are we trying to achieve as a group, and making sure that we can have the tough conversations, but knowing what we're driving towards. And as Dave was mentioning, with a team of 100 people before we acquired, 400 people post-acquisition, that's a lot of understanding where people's needs are. So how to get all those together in the most effective way possible, but in a very human way, I think was something that we did quite well. There was a high level of retention. With our teams, a high level of productivity that we've seen. And that came through a lot of those one-on-one conversations, employee surveys, sitting down and really getting to know the human and essentially being effective with that strategy.

I'm curious if you've had any negative experiences with people who have purchased the app and been unhappy about anything.

Yeah, absolutely. When you have a million users with the last product, there are definitely people who were unhappy with that. Some of that just came down to communication. They, some people people thought that the spare change that we had was coming out of thin air and that we were gifting them spare change. And they were upset that they had to use their own money to be able to manage the roundups. Different people are in different financial situations. And sometimes when someone's living paycheck to paycheck and our app deposit schedules don't align with their payday schedules, it made it difficult and accounts were overdrafted. Being empathetic to their situations, negotiating contracts with, with banks to be able to leverage lower fees for overdraft charges and being able to manage that was important. Yeah, we definitely had some negative situations, but nothing, nothing too dramatic, I would say.

That's good. And how do you anticipate with future money, are you guys thinking about how we're gonna deal with disgruntled customers?

Yeah, I think I'll jump on this one, Phil, and then you can fill in afterwards. But already we have a, a pretty robust support system, which is primarily chat-based, knowing that our audience really prefers that, that medium as a means of communication so that when something should occur, then they can just send either an email to our support email, or they can send us a chat, and then we can get back to them and we can prioritize that quickly. And then there's a record of all of that. We're today doing a lot of customer support on, I would say, more basic issues. Being an early stage, sometimes there are error screens that pop up or things like that that you need to work through, just technical issues. And our team, I gotta give our technical team a lot of credit that they're really motivated to resolve those and have, we've seen really good turnaround time on resolving those. But I fully expect that, as I was mentioning market cycles, you know, as we go through several market cycles, there are always downturns. And when there are downturns, clients inevitably will, you know, have some negative feelings, some concerns, some fears, and that totally makes sense. It's a human experience, right? And so they will reach out, and that's a really important moment for us. I think going back to your point about listening to them, not to invalidate their fears and kind of brush it aside and say markets always recover, whatever, but to listen to what their concerns are and really empathize with them and do our best to educate throughout that whole life cycle when they're onboarding throughout time. Financial education is something that, that is sometimes not where it should be. There's a lot of, there's a lot of, so I saw financial literacy news recently that said about two-thirds of Americans could not pass a basic financial literacy test. And so we're We understand that folks may not be, let's say, experts in investing, and we don't think that they need to be, but it's part of our role to work with them when there are ups and downs of the market. And even just to set expectations. At our previous company, we would sometimes have people writing in to say, why hasn't my money doubled over a month? And they just came in with a certain expectation that was not reflective of reality. But you just have to work with them and do your best to educate them and to get them to understand the value of the product. And obviously we take our learnings from any points that we haven't been sufficiently clear on and iterate on that as well.

You guys have both mentioned empathy as being a key component to what you're doing, and I want to reinforce that. And empathy really— and Dave, you were talking about invalidating people. The most basic form of empathy is validating somebody else's emotions.. And what I teach is a skill called affect labeling, where you're literally reading the emotions of another person and then reflecting back to them what they're feeling. You're angry, you're pissed off, you're frustrated, you're scared, or whatever it might be. And this is the fundamental skill that, for example, in the Prison Project, we use to help people in prison stop prison violence because the biggest need people have more than anything else is to be heard. At a deep level. And if you can listen to them and make them feel heard from their frame of reference, all of that anger goes away almost instantly. And now you can sit down and they're in a mode where they can listen to you and learn. So think about that. You're already both really big into empathy. Think about how, as you grow, having a customer support system based on empathy, validating emotions, As opposed to just fixing problems might really set you apart from everybody else. Something to think about.

Absolutely love that. And I would just double, not just customer support, but also product experience. I'm making sure that they're feeling fantastic going through that and understanding the feelings that someone may be going through, whether they're nervous or concerned or feeling great and happy to be able to build that, that Right.

Okay. A couple more questions and we'll wrap it up. Phil, what's one thing about yourself we'd never know about unless you revealed it to us?

That's a great question. I am probably the world's pickiest eater. I have the palate probably worse off than Dave's twins at 10 months old. You can give me chicken nuggets and, and french fries and I'm happy. So yeah, I am, I'm a very, very picky eater over here.

I would never know that. How about you, Dave? What's one thing about yourself we'd never know about unless you revealed it to us?

Trying to think of a weird fact. When I was in, in university in business school, was part of a, an inter-university competition. They did case competitions and stuff like that, but they also had a sports competition and I was on the dodgeball team. So, competed for my school in dodgeball.

I haven't heard about that since I was 8 years old. Good for you. You wouldn't know that I'm a jazz violinist unless I told you that. So, yes, gentlemen, it's been a real pleasure chatting with you today, and I wish you the best of luck in your new adventure. It sounds like you're doing some great work in the world. Thanks so much.

Thank you, Doug.

Doug Noll here. Thank you so much for listening to Listening with Leaders. If you are a successful executive leader who would like to be on this program, please visit podcast.dougnull.com/podcast. If you got something out of this interview, would you please share this episode on social media? Just do a quick screenshot with your phone and text it to a friend or post it on the socials. If you know someone that would be a great guest, tag them on the social media to let them know about the show and include the hashtag #ListeningWithLeaders. I love seeing your posts and guest suggestions. We are regularly putting out new episodes and content. To make sure you don't miss any episodes, go ahead and subscribe. Your thumbs up, ratings, and reviews go a long way to help promote the show and mean a lot to me and my team.

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