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Living in New York City has its perks, but it comes with a heavy price – literarily. Everything in the Big Apple is expensive: food, clothing, rent, even parking. We all have budget goals to order one less drink, call one less Uber, and buy one less jacket, but we rarely succeed. As a college student, I know this problem painfully well.

However, for students, overspending is less of a problem than for adults who have families to support. That’s where CFPs, or Certified Financial Planners, come in. CFPs help their clients plan out their budget so that they can have that downpayment to buy their first house, start a college fund for their children, or even start saving for retirement.

“Access to Certified Financial Planners… is very very hard,” Rishi Gowda, Cofounder and COO of FyStep, explains, “…[and] the people who do access them tend to be older age groups who can afford it.” Financial planners usually charge high hourly rates, so hiring a financial planner is a big monetary and mental investment for the client to really change the way they spend, and in turn their lifestyle.

Rishi is a freshman at NYU studying Economics and Data Science. He had the idea for FyStep when he was in high school in Atlanta, Georgia. Initially, Rishi just wanted to learn more about financing for his own future. This was during the period of COVID when the GameStop and AMC mania was all that people were talking about. “Financial forums were blowing up on Reddit,” describes Rishi, “so I was like, okay, there has to be a way for us to ask questions to professionals without any kind of commitment.” Rishi remembered a company he came across called LegalSpark, which basically gives on-the-fly legal advice from “freelance” lawyers for around $20. Rishi wanted to do something similar in financial advising.

Financial Advisors are not the same as Financial Planners. The difference is that while Financial Planners help plan out your everyday budget and charge an hourly fee, Financial Advisors focus more on investing your money and charge a commission on AUM (Assets Under Management). However, they face the same problem: leads. Both jobs are very network-centric – in order to get more clients, the FAs and CFPs have to either cold email or get their names spread by word of mouth. “So I was like, okay, if somebody has a financial question, they just pay $20 for 20 minutes and they get access to one of our financial advisors on the backend,” Rishi thought to himself, “the whole concept would be that they spark a connection and become clients.”

But there were a lot of problems with this model. First, the business would not be scalable. Charging a one-time fee for a one-time call with a Financial Advisor doesn’t give the FAs much incentive to be on FyStep. Second, financial questions are different from legal questions – legal questions are clear-cut and sometimes a necessity, “Am I going to jail for this?”, while financial questions are neither. Third, Rishi’s target customers are the average Americans, who have a lot less liquid assets than the middle to upper class, which keeps FAs away.

That’s why Rishi pivoted FyStep from Financial Advising to Financial Planning around three months ago. He had already started building an MVP before the pivot with a tech team in India. With help from HydrogenAPI, a company that builds white-labeled Financial Platforms as a service, FyStep is developing its product of automated financial advice from AI mixed with personalized advice from CFPs. Aside from the tech team, FyStep has two board members, one of whom is a FA out of Atlanta, and two marketers on retainer in California. Rishi’s Cofounder and CEO of FyStep, Bob Griffin, runs a Private Equity group out of Atlanta.

FyStep is planning on launching its product in about two months when the tech is fully mature. It will first target the young professionals of NYC, then move on to college students and other age groups. Instead of the traditional hourly-wage model, FyStep will take a revenue model that’s more familiar to the youth – a SaaS subscription. Another reason FyStep is targeting the younger generation is that young people don’t really know where to start in the search for financial advice. “It’s almost like going to an individual doctor,” Rishi explains, “which one do you pick? Verses going to a big hospital.” FyStep would be a central hub for accessible, reliable, and professional financial planning services.

There are risks with what FyStep is trying to do. Financial Services is one of the oldest and most mature industries in New York City. That’s why Rishi plans to do some pilots and beta testing between now and the launch, to get a better feel for FyStep’s product-market fit. When I asked Rishi what his one-year goal was, he replied: “My one-year goal is either to fail fast or succeed slightly.” Rishi wants to go big or go home.

If the launch is successful, Rishi wants to upgrade FyStep’s current revenue model to be more comprehensive. Right now, FyStep’s CFPs charge $20 a month to their clients on FyStep for access to four calls a year, and FyStep takes a 5-10% cut of the CFPs’ profits. “In that scenario, our costs are fixed,” outlines Rishi, “we’re paying a yearly cost to 2-3 CFPs…. But all this is not going to be there in a world where I hire [CFPs] in-house.” Rishi believes that each in-house CFP can service up to five thousand clients a year with help from automation. Rishi also wants to have different plans for clients to choose from: a $6 per month plan would get you automated advice with finishing touches from CFPs; a $30 an hour fee can be paid to the CFP personally for one on one consultation; a $20 a month subscription fee can be paid to FyStep for unlimited meetings with FyStep’s in-house CFPs.

FyStep’s indirect competitors are targeting the automated-financial-advice space as well. However, companies like Personal Capital, Charles Schwab, eTrade, WealthFront, and Betterment don’t have the hybrid model that FyStep adopts, and FyStep is going after a different customer group than the abovementioned companies. FyStep’s direct competitors are actually the low-end CFPs themselves, but there is also space for cooperation between them. Eventually, the vision is to accumulate a network of young professionals who have saved up money through FyStep over the years, and then go into the Financial Advising space with an established customer base with attainable AUM.

FyStep’s goal is to completely disrupt the Financial Planning market. “I want to… force companies like Schwab and established financial planning companies to change their model,” says Rishi, “…[to make] Financial Planning more accessible.” If the launch goes well and FyStep carries out its vision, perhaps we’ll find NYU students actually using all their meal swipes in a few years.

Koko Xu

Lover of international cuisines and Class B chess player.