Subscription-based planning firm Facet has added tax preparation and filing to its flat-fee membership plans. Facet has white-labeled technology from april, an embedded year-round tax platform, to bring this capability.
This is the latest product added to Facet’s flat-fee membership, which now includes more than 24,000 members with $5 billion in assets. Membership also includes financial planning, estate planning, insurance, direct indexing and alternatives.
Facet focuses on the mass affluent market with less than $2 million in overall net worth. It estimates there are 100 million households with complexity and nuance in their financial lives; these folks could benefit from working with a financial advisor, but don’t have the investable assets to get the attention of a traditional advisor. Facet has built a service that is more affordable for the mass affluent, yet still provides that high-touch.
“Over time, what we’ve done is really built a one-stop-shop financial hub for all your financial needs,” said CEO and co-founder Anders Jones. “We start with advice. That’s kind of the most important thing—get a plan and a roadmap together. But then, from there we really see enormous value in helping our members take action on advice.”
The firm launched estate planning last year via a partnership with Wealth.com. Earlier this year, Facet added direct indexing and alternatives to its core investment tool through a partnership with Orion.
Tax prep was the next most requested service, Jones said.
“We already do tax planning and tax strategy, but then bringing in the actual filing in one seamless way is really the way to bring it all together,” he said. “More and more the world is realizing that this is the direction that, if you want to compete in the coming decades, you have to have these capabilities, and they have to be in-house and you have to have this seamless transfer between the different segments of financial planning.”
The amount of tax help depends on the membership level; “plus” members can have their federal and state taxes done online with expert review. Under “complete” membership, the highest tier, a certified tax professional can handle their entire return. For $2,100 a year, members get access to Facet’s lowest tier “core” plan, which provides access to a financial planner, the core components of a financial plan and money management capabilities. Estate planning and tax prep is also available to core and plus members on an à la carte basis.
Jones said the firm is next looking to build out a lower-cost product for mass market investors, although he declined to provide any details publicly.
“Our strategy all along and our aspiration all along has been to push further downmarket, and that actually makes us fairly unique relative to anyone else in the industry,” he said. “We’ve built Uber Black; we’ve taken something that’s reserved for the wealthy and made it more accessible and better. What’s up next for us is Uber X, which is how do we take the learnings from what we’ve built and make an even lower-cost offer for someone who’s more mass market.”
Facet was founded in 2016 by Jones, Brent Weiss and Patrick McKenna. The firm’s original client acquisition strategy was to buy other advisors’ books of business. It focused on buying the business of smaller clients who were unprofitable for advisors, a group that included older clients on the cusp of retirement.
In 2019, Facet shifted its business model from acquiring the smaller accounts of other advisory firms to a direct-to-consumer model.
Last year, the firm raised $35 million in new financing, led by Multiplier Capital, with additional investment from previous investor Warburg Pincus, as well as Audacious Capital and others.
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