I’m slowly recovering from a fantastic underbanked conference put on by CFSI last week.  I have been to all five, and this was the biggest and best.  If you missed it, be sure to mark your calendar for November to submit ideas for presentations and February to take advantage of the early bird specials, so you don’t have to pay $1600.

I was really surprised by how many companies are thinking about saving and investing.  mPower’s Gratio Capital is one of the coolest and targets the underbanked.  Betterment and Plantly offer online solutions to a Main Street audience.  Quite a few of the big banks offer new programs, playing catch up to Bank of America’s Keep the Change.  Several prepaid card (GRP) programs are actively seeking savings or bond purchasing solutions.  Is saving really the new spending?

All three investment startups are based in New York, for what it’s worth, and have made their debuts within the last couple months:  Gratio’s product is called GoalMine.  Basically, they offer a low cost of entry ($25 min) for a very simple product (no choices of what stocks and bonds to pick) that you will be able to purchase at a retail location or online.  They also understand that people save more when it’s towards a goal and will offer “GoalPacks” for a rainy day, a baby, a house, a vacation, etc.

I spent some time with the founders of Betterment.com.  Their solution is online only, not targeted to the underbanked specifically, and quite clever.  Basically, you make contributions through ACH (the banks’ online transfer system) and from there you have one simple slider with which you control how your money is invested.  On one extreme, you can pick all treasury bonds, on the other, all stocks.  Low risk to high risk, or anywhere in between.  What’s cool is that in no case do you actually have to pick any particular stock or bond.  Instead, the guys at Betterment will invest in index baskets of either, so you’re tracking the market.  On the low risk side, the treasury bonds they are using are protected against inflation loss, which my ING Direct savings account is not.  So, while not FDIC insured, it is government backed and guaranteed to outrun inflation (around 2.5% at the moment).

Plantly is still in beta and I have yet to meet their management.  From what I can tell, their goal is to offer mass customization in favor of extreme simplicity.  I’m guessing it’s a fractional share approach, where each of their users can make smaller contributions into one of their 100’s risk adjusted options.  An information rich, risk-based approach where they pick the underlying securities.

What these examples share in common is a lower cost of entry, online access and tapping into an apparent zeitgeist of an America up to its ears in debt looking for a new way.

(thanks to Ailian Gan for finding Betterment and Plantly)