FintekNews is pleased to offer our weekly feature column 3 Questions. Each week, we feature a thought leader within a unique sector of fintech and ask them to answer just 3 questions for our audience in their vernacular. This week, we’d like to introduce you to Larry Shumbres, CEO of Totum, the only risk tolerance digital questionnaire that helps financial advisors understand how much risk their clients can comfortably take based on their life situation.
NAME: Larry Shumbres
COMPANY: Totum Risk
WEB ADDRESS: www.totumrisk.com
How did you personally become involved in fintech?
I started my career selling hardware and software for IBM, but always had a passion for finance. In 2005, I made an industry change and went to work for NYLife MainStay Investments in New York City. My next move was to Morningstar. While I was there, I was introduced to the fintech industry and knew that it was the perfect fit for both my financial interests and technology background. Since then, I’ve had the honor of working for some incredible companies like Charles Schwab, eMoney (acquired by Fidelity), eVestment (acquired by Nasdaq), and now Totum Risk. Each company contributed to my overall knowledge of the fintech industry and I look forward to continuing my career in this exciting space.
What does your firm do/offer within the fintech sector?
Totum offers financial advisors the ability to connect with their clients through an online risk tolerance questionnaire. Typical risk questionnaires ask a client how much risk they are willing to take, otherwise known as risk preference. With Totum, life situations are taken into consideration, creating a more accurate representation of how much risk a client can actually take given their current circumstances, something we call risk capacity.
In order to offer a more accurate and compliant risk tolerance product, we built quant models behind each question that runs through our algorithm to help advisors find the total loss potential a client is willing to take on annually, which further aligns with our models for each asset category.
There are numerous ways that Totum is willing to customize the product to meet our clients’ specific needs. We offer integrations with custodians, broker/dealers, insurance firms, banks, and third party fintech products, in addition the ability to add your own questions, add the questionnaire link to your website, custom reporting, investment policy statements, monte carlo simulation, upside/downside chart, stress testing, white labeling, and more.
What area/s of fintech do you believe will grow the most in the coming 5 years?
There are three areas where I foresee growth in the next 5 years. First, there’s a strong need for an all in one, SSO (single sign on), online aggregation dashboard for financial advisors. Some financial firms, third party products, and large RIAs are already creating their own. These SSOs will include everything from tax prep and loans, to insurance, peer to peer lending, and CBOE futures token trading. The second growth area is cryptocurrencies. Though Bitcoin is the most well known, Fidelity’s integration with Coinbase is a major indicator of what’s to come with large financial institutions. The third area where I see growth is cybersecurity. The level of security breaches we’ve recently seen is unprecedented, and there are many fintech companies already working on new technology (facial recognition) to prevent further cyber attacks.
Larry Shumbres is CEO of Totum Risk. Prior to joining Totum, he held senior management positions at eVestment and eMoney along with Schwab Institutional and Morningstar. Larry is an athlete, father, and builder of businesses, and resides in the Atlanta area.