Today, PeopleTech Partners sits down with Will Peng, founder of the financial wellness platform Northstar. Will is the CEO and Co-Founder of Northstar. Prior to founding Northstar, Will worked in Venture Capital and was an early investor in Coinbase, Guideline, Even, and Oscar. Inspired by the positive change fintech can have on people’s lives, Will set out to solve the inequality of financial guidance. As a Taiwanese immigrant, Will is passionate about supporting underserved communities to help them achieve financial stability and reach their personal goals.
Will, could you tell us more about how your personal story influenced you to start Northstar?
In many ways, this is the only problem that I could be solving right now, and that I’ve dedicated my career to. My personal financial story highlighted the systemic challenges many Americans face in achieving financial wellbeing.
I was born in Taiwan, and my parents moved our family to the US to create opportunity for their children. When I graduated from college with $35k of student debt, my parents didn’t have the knowledge to help me navigate my complex financial situation. Which loan should I pay off first? Should I invest in my 401(k), build emergency savings, or pay off my debt? Like the majority of Americans, I had nobody to turn to for advice. I had to learn the hard way how to pay off that debt and build up savings.
I know too many people, myself included, who did their best to understand, but still made poor decisions. It showed me that people need an advocate for their priorities and goals, with no ulterior motives, and at an accessible price. I also knew that it’s difficult to take action on the advice. When I was working in venture capital I saw the impact fintech companies could have on people’s lives — our investments included fintech innovators like Coinbase, Guideline, and Oscar. I knew that we had a unique opportunity to solve this problem in a mission-aligned and actionable way.
My co-founder and I started Northstar as a way to give back in terms of what we’ve learned around how to manage our finances. This mission is at the core of everything we do — creating equal opportunity for everyone regardless of upbringing and socioeconomic background. Northstar is a new system that enables us to help individuals make the best financial decisions for themselves.
Who should use Northstar?
Northstar was developed to benefit everyone, regardless of their financial situation or life stage. Today we help everyone from recent graduates in debt with negative net worth to individuals later in their careers preparing to retire comfortably. With our self-service fintech tools and the 1-on-1 support of a personal financial advisor, individuals can get hyper personalized advice based on their unique circumstances, so they can make financial decisions with confidence.We believe financial wellness starts with a single paycheck, so Northstar partners with employers to provide our service as an employee benefit. While our mission is to provide personalized advice to employees about their finances, by doing so we’re also able to support their employers. Northstar serves as an extension of HR and People teams: we help employees make the most of their compensation, equity, and benefits, handle related employee questions, and ultimately drive greater benefits adoption.
How is Northstar a breakthrough for the financial wellness industry?
Northstar has developed a financial wellness platform that takes a completely new approach to managing personal finances. Our team is innovating on traditional financial services and HR tech in a few key ways:
1. Automation: Instead of reading through a list of recommendations or a financial plan, users can leverage Northstar’s tools to automate their financial decisions and solve the behavioral challenge with personal finances — actually implementing advice.
2. Emotion: Northstar takes into consideration the emotional aspect of finances to provide an experience that is inclusive of all different situations and backgrounds. Each user is matched 1-on-1 with a dedicated financial advisor based on shared experiences.
3. Compensation: By including an individual’s salary, equity, retirement accounts, health plan, and other benefits details into Northstar, we’re able to provide a more complete picture of their finances. This data enables our tools and advisors to help our users achieve their goals faster.
Why is this a problem worth solving?
The financial inequality in this country is already grave and continues to worsen. According to a report from PYMENTS, 70% of millennials live paycheck to paycheck. There are so many financial services and benefits available to us today — roboadvisors, index funds, HSAs and FSAs, Roth IRAs, and more. But how do you know what’s right for you? The wealthy hire financial advisors to navigate these highly personal choices, but that is unattainably expensive. We believe you shouldn’t need money to make money, so we decided to democratize access to financial knowledge. Northstar is on a mission to help level the economic playing field. By working with employers, we believe we can realize that at scale and help companies support a more diverse workforce and improve their employees’ quality of life in the process.
What are some of the companies that offer Northstar to their teams today?
Northstar is committed to supporting a diverse range of employees as well as employers, and has partnered with companies of all sizes, across industries, and at different stages. Today Northstar works with companies including Zoom, Invitae, ServiceTitan, Snap, Thumbtack, Discord, and more.
We partner with employers that are listening to their employees and redefining what “standard” benefits look like today. According to a recent study by Charles Schwab, 79% of employees see financial wellness as an important benefit. Research from Bank of America found that 86% of employees would participate in an employee sponsored financial education program. Northstar not only meets that need, but helps employers determine what else their employees may need in terms of benefits to reach their financial and life goals.
What have you learned from your users that People leaders should know?
If there’s one thing we’ve learned, it’s that there is often so much going on in employees’ lives behind the scenes that their colleagues don’t know about. According to a study from MetLife, nearly 3 in 4 employers believe employees are better off than they actually are. Whether an employee is supporting aging parents, struggling with infertility, or thinking about moving states, they are facing difficult and stressful decisions outside of work. We all saw mental health benefits skyrocket over the past few years and now are seeing the same for financial benefits as people look to take control of their finances.
Northstar’s financial advisors, who are trained in empathy and mental health, can help bridge the gap of supporting individuals through these situations and helping them make decisions that can have a massive impact on their financial and life goals. In doing so, Northstar is able to identify themes across organizations and share top goals with employers to help them deliver more relevant benefits that will best support their workforce.
What should People leaders evaluating financial wellness tools consider?
When it comes to getting financial advice, there is no one-size fits all approach. Some employees are going to want to do-it-themselves and input their data and play with scenarios to evaluate decision-making. Some employees are going to want to chat with their advisor and detail their circumstances, but retain that veiled sense of anonymity through messaging. And some employees are going to want to jump on a video call to talk things out with their advisor, and maybe even bring their partner along. Northstar was designed to transform people’s perceptions about seeking financial help. Our hybrid approach of self-service tools and full-time financial advisors empowers people to get professional advice however they prefer so they can reach their financial goals, support their families, and ultimately achieve financial stability and security. Northstar’s model has not only supported incredibly high utilization, but high employee satisfaction as well.
What have you enjoyed most about building Northstar?
It’s been incredibly rewarding to collaborate closely with our members and clients on co-building the future of financial wellbeing and redefine the employee experience. As a product-led organization, we lean in to product collaboration to continue to innovate and provide a best-in-class experience.