“Better Banking Built For Seniors” with Sam Zimmerman of Sagewell Financial

Jonathan (0s):
Welcome back Radio Entrepreneurs. I’m Jonathan Freedman. And our next guest up on Radio Entrepreneurs is a serial entrepreneur, Sam Zimmerman, CEO, and co-founder of Sagewell financial. Welcome to Radio Entrepreneurs.

Sam (12s):
Thanks for having me, Jonathan.

Jonathan (14s):
Great to have you, I understand this is not your first venture. So you want to tell our listeners a little bit about your background.

Sam (20s):
Yeah, happily. So I’ve been working in FinTech for the past decade. I re I remember first using the word FinTech and being like, ah, this doesn’t feel quite right. And now I feel like it’s the only thing. Every company has a FinTech, but yes, my, my path to entrepreneurship started as a high frequency hedger, where I thought a ton about risk. I moved $20 billion around the markets made a bunch of money, but I didn’t know what I was building. And so I love the risks and I love taking bets, but I was looking for kind of the opportunity to actually build something, to, to know the thing that had the best kind of track to the real world.

Sam (1m 0s):
And so my first company was called Freebird and Freebird was a riff on travel insurance. So we helped folks when their flights were disrupted. I personally kind of love to find sleepy consumer finance industries, where the user has been forgotten that the margins are kind of off the players or, you know, their websites look like they’re from the nineties and make a new product that kind of changes the game that a new financial product that manages risk and a lot more user centric way. And, and Freebird was my first go there. Well, what Freebird does it did, it’s actually, it was acquired by capital one in 2020 is whenever your flight was disrupted, we got your information beforehand and we’d reach out to you proactively while you’re there and say, Hey, we see, you’re trying to go from Boston to LA.

Sam (1m 54s):
We know you’re in Boston, here’s all the other flights from where you’re at to where you’re going, click the one you want click confirm and walk your new gate. We’ll, we’ll pay the cost of the new ticket. So we help folks get to where they wanted to go.

Jonathan (2m 8s):
So really a seamless consumer play. And, and like you said, proactive people must’ve really appreciate it.

Sam (2m 15s):
Yeah. I mean, we help folks get to weddings. We help them make funerals. We help them make their kids baseball games, important work meetings. Like whenever you feel powerless in that airport and you’re scrambling and stress and balancing 17 other things that was really, really meaningful. And you know, the incumbents in this space, massive margins, it’s a horrible product. They try to upsell you at the end with a scare tactic here or there. And so, yeah, it was an exact exactly, like you said, it was that

Jonathan (2m 42s):
Not only that, obviously a great idea if capital one came buying and, you know, timing is everything right. Probably at the ideal time for you, as well as travel is taken a dip, you guys are getting acquired. So perfect. Hopefully we got the front end of the pandemic.

Sam (2m 58s):
It was it definitely the timing could have been better, but in the, at amazing exit in it and really exciting, I think for all the folks involved.

Jonathan (3m 9s):
All right. So let’s talk a little bit about your current, then you pivoted and, and came up with the concept for Sagewell.

Sam (3m 15s):
Exactly. So Sagewell comparably. I wanted to find a sleepy industry or the user had been forgotten and make a new financial product that meets their needs. And so that sleepy industry is retirement finance folks who have left the workforce and who are spending down assets. They’ve made most folks don’t think they’re on the internet. They are. And while a hundred billion dollars last year went into about a hundred billion dollars, went into fintechs last year alone, a fraction of a fraction of a fraction, less than a 10th of a percent went to the 56, 50 8 million Americans living on a fixed income.

Sam (3m 55s):
And so that was the sleepy industry and the, the new financial product, the user aligned financial product is our, my paycheck. So Sagewell as a company is building the banking that our parents deserve. And our marquee feature gets are our parents and folks like them, their retirement income faster for free. So there’s a,

Jonathan (4m 20s):
So walk, walk us through at a high level, just what, you know, what the process or transactional aspect is when you say it gets them their money faster. That’s their retirement savings through a you’re serving as a bank banking intermediary, or I guess not a bank technically, but

Sam (4m 37s):
Yep. So our mission is to really leverage the insights from Silicon valley that had been applied to gen Z and millennials, and apply them to our, our parents and, and America’s retirees. And so our first marquee product looked at the earned wage access movement. So that is a trend in payments where, you know, an Uber driver who finishes their shift can get their pay immediately. A pizza delivery person get paid to meet lead nursing shift. They get paid as soon as your shift is done, there’s a whole host. There’s, you know, there’s dozens of companies now that are exists to help hourly workers specifically, but not only access their money, as soon as they’re entitled to it.

Sam (5m 23s):
Now what’s kind of cool. Is that

Jonathan (5m 25s):
You’re the Venmo for retirees. Yeah, yeah,

Sam (5m 27s):
Exactly. Is it’s social security. It’s annuities, it’s 401ks, it’s pensions. And we, you know, they direct their deposits to our checking account and then we make a paycheck. So a lot of these programs pay the last business day of the month. They, some annuities pay every two months and so seniors have to manage these really bumpy, lumpy, confusing payment streams. And so what we do is we say, Hey, we’ll combine all of them and we’ll advance them. We’ll pay you on the first and 15th and that, and then whenever the money comes in later, we’ll catch on the other side. So you can get a paycheck just like you had when you were working, balancing your budget is a bit easier and you can have that money a bit sooner.

Jonathan (6m 12s):
Fascinating. So you, so you’re really on your way to disrupting another industry. It sounds like, and really making it simple. So something that you’ve been oriented, your entire working adult life, I E getting a paycheck in a regular increment, you don’t have to worry about managing disparate streams of income. It all gets aggregated on your platform and distributed in whatever increment works for them. I assume we’re, you know, maybe there are options maybe there aren’t

Sam (6m 41s):
Exactly. W w we, we do support a variety of different options. But what is interesting is that we, we think of ourselves like payroll and benefits for when our, our users are the boss and the retirement. So we help them make their paycheck. And then we also help them navigate a lot of senior specific challenge, like, you know, Medicare or home equity planning, or care planning, or, you know, the unfortunate events like the death of a spouse or move to Florida. We want to be kind of a company that, that forms relationships with folks and help them connect the dots across their retirement life.

Jonathan (7m 17s):
Hm. So how, how far along are you guys, are you a conceptual stage or a, I mean, we’re talking early 20, 22, and it sounds like you were involved in another entity up to 2020. If you built out the platform and you’re you’re live and working, and people can go and use the product today.

Sam (7m 32s):
Yeah. You can go to Sagewell financial.com and sign up were actually in a really exciting moment where we’re scaling. So we, we have built our, our, our platform we’ll of course be adding to it with the 5.2, $5 million that we raised. We’ll be continuing product development. And, but we are aggressively growing throughout the course of this this year, because we’ve seen incredible interest in demand in the, in the product that we built

Jonathan (8m 1s):
And tell us, you cite a figure of about 58 million Americans living on fixed income of some sort. And is that people that are post working era that was, or people that are quote unquote retired. And is that who the target demographic is

Sam (8m 19s):
Exactly. That is who our target demographic is. So I will say that, you know, because about one in three boomers had no retirement savings and the pandemic forced 4 million more people out of the workforce into retirement. And so this as life expectancies are expanding. This phase of our lives is really, really long. And it tends to be a little zig-zaggy, you know, a lot of our retirees have a part-time job. They volunteer several hours a week. They’re there, there’s the phase of life of kind of you work. And then you don’t, it’s becoming a little mushy in light of some of these trends. And so some of our users do have a, have a job, but they’re really kind of post their posts their career.

Jonathan (9m 4s):
So it was, is the entire platform essentially self service, or do you have advisors who work with people to say, oh, you’ve got, you know, X from this source of income you’re working part-time and sort of figure out what the mix is. Cause that seemed to me to be what a lot of people might struggle with is like, you know, I used to make three grand a month now, suddenly I have 400 here, 700 here, 900 here, how do I put it all together and make sure that I manage my cashflow effectively?

Sam (9m 30s):
Yeah, no, it’s a, it’s a brilliant question actually kind of is our second major feature. So we actually assign a specific person like a Danielle or a Sam or a Chris to every person who opens a Sagewell account with us, who learns your finances, knows the name of your voice. Another concerning trend in banking is that as banks are all going digital retirees who have, are used to relational banking are left out. And so our second major feature is, you know, a person and a person that connects the dots across your retirement financial life. And so that’s a really important part of reaching our user base and, and protecting them.

Sam (10m 10s):
There’s been $3 billion of fraud that’s occurred. And oftentimes having a human who knows their situation in the loop is a way to protect some of those fraudulent attempts.

Jonathan (10m 21s):
It’s fascinating how many times you can have a conversation not pointing out seniors, but how many times you can have a conversation about don’t open things that are from people, demanding information that you don’t know, you know, and it’s funny how you see now PSA’s by the government. You know, the IRS will never send you an email and things of that nature. And invariably, probably thousands of times a day, people are opening up emails from the IRS, sending, sending them personal information.

Sam (10m 45s):
Yeah. We actually, that we have that feature in the platform. We call it our security center and we say a tech weird text or email or phone call just that shoot us a note, upload a screenshot. And you know, we’ll, we’ll help think it through with you. What we found our user research is a lot of retirees are digital, but they sometimes are a little uncertain and they have to go ask their kids and they feel kind of, they, they they’re made to feel kind of stigmatized or, or otherwise kind of not digitally savvy. And so we wanted to create kind of a stigma free part of our platform where we could protect our users money, which is in both of our interests.

Jonathan (11m 22s):
So just to round out sort of the brain to services, you guys are managing the pool, so to speak and providing access to in some sort of regular incremental basis. Is it bill pay as well? Do you help them on the expense side or is it strictly to manage income flows?

Sam (11m 39s):
So we think of ourselves as the de cumulation spend platform. So you have your financial advisor, you have your 401k, whatever we make the paycheck, the paycheck goes into our account, and then we help you spend it. So we do bill pay, we have a massive ATM network. We actually help our users shop for some of their biggest purchases, like, you know, a home and auto insurance, as well as making sure it kind of, they’re not overpaying on their, on their mortgage, which for seniors can be a little tricky to get refinanced. So we really think of ourselves as your financial advisor helps you make the money and we help you spend it and save it and budget accordingly.

Jonathan (12m 18s):
Excellent. Well, it sounds like a, a, a wonderful service and it sounds like you guys are relatively speaking off to a great start. I mean, relatively, because it seems new, but it sounds like you’re already accelerating up that curve. Wonderful. So

Sam (12m 29s):
Yeah, exactly. It’s that, it’s that moment in time. I think the whole team sees the market opportunity, sees the voice of customer. Our investors are behind us and it should be a really fun 20, 22.

Jonathan (12m 41s):
Wonderful, well, we wish you continued success and love to hear more as you, as you continue along that up the steep curve up, let’s have Sam Zimmerman, CEO and co-founder of Sagewell financial. It’s been a pleasure having you on Radio Entrepreneurs. If people want to get a hold of, you want to learn more about Sagewell want to talk with members of your team, or I assume you have live sounds like you’ve got live people as opposed to just clicking here and clicking there. But if people want to reach out to you, what’s the best way for them to get ahold of you,

Sam (13m 7s):
Just head to Sagewell financial.com/press. If you want to engage with CA kind of come from this interview, it’s helpful for us to triage. If you want to make an account, you can just go to our homepage and click sign up.

Jonathan (13m 21s):
Great. It’s been a real pleasure having you on a Radio Entrepreneurs, Sam Zimmerman, CEO, and co-founder of Sagewell financial.

Sam (13m 28s):
Awesome. Thanks so much.

Jonathan (13m 29s):
And we’ll be right back with another segment on Radio Entrepreneurs.