"We have a scale curve, and it is so unbelievably low it blew our minds," she says.
Another advisor and investor in the company, Norm Boone of Boone Financial Advisors in San Francisco, says the key to BeniVest will be the way Panagakos has automated the analytical side of financial planning. "By breaking financial planning into its smallest parts and being able to automate what is automatable, they get incredible levels of efficiencies," he says. "But they haven't given up the personal part."
In that way, he says, the company has cleared a hurdle that has prevented other advisory firms from entering the moderate-income market. "It's really a capacity issue," Boone adds. "If I go in and work for Cisco, and they have 1,000 people who want financial planning, how am I going to do that?"
One of the ironies of the BeniVest startup is that Panagakos originally thought of the idea during the raging bull market of the 1990s. At the time, she thought individual investors desired help in navigating the glut of options available through the Internet and other sources. "Folks didn't know what to do with all that stuff," she says.
At the same time, she believed people highly valued a personal relationship with their financial advisor. What she found is that people continued to want these things just as much after the market downturn.
"The need is even greater," she says. "Interestingly enough, it's in times like these that we can provide a lot of value in helping people stay their course."