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Robo Advisors: Here's how to craft the optimal customer journey

Sat, 02/18/2017 - 5:02pm  |  Clusterstock

With the tremendous growth in robo advisor assets under management (AUM), financial institutions are scrambling to figure out how to build and become a robo advisor.

Starting a robo advisor service combines financially savvy with big data analytics, as well as a comprehensive understanding to how robo advisors work.

Robo advisors are platforms that leverage algorithms to handle users' investment platforms. And they are poised to transform the tremendous worldwide wealth management industry. 

MyPrivateBanking's report, Robo Advisor 3.0, takes an in-depth look at the basic challenge of every robo advisor: how to craft a presence that succeeds in convincing website visitors to sign up as investors and then remain on board.

In this data-driven assessment, the report looks at the characteristics, business models, and strengths and weaknesses of the top robo advisors around the world. The research was conducted on a total of 76 active robo advisors worldwide - 29 in the U.S. and Canada, 38 in seven European countries and nine in the Asia-Pacific region. We've compiled a full list of robo advisors analyzed below.

The exhaustive report provides comprehensive answers and data on how to optimize the individual onboarding stages (How it works, Client Assessment, Client Onboarding, Communication and Portfolio Reporting) and details five best practices for each stage. Furthermore, the report provides strategies to appeal to different segments such as Millennials, baby boomer investors approaching retirement, and high net worth individuals (HNWIs), and analyzes the impact of new technologies.

The report provides comprehensive analysis and data-driven insights on how to utilize robo advisors to win and keep clients:

  • What a robo advisor platform should offer to successfully convert prospects into happy clients.
  • Which robo advisor features work and why.
  • What are best practices for the different stages in the digital customer journey.
  • How long clients need to onboard on the surveyed robo advisors and which specialized offers are given.
  • What the client assessment process should include 
  • How client communication should be (inbound for customer service and outbound for news, education and commentary).
  • What good portfolio reporting looks like, so that it meets the information needs of the customer.
  • How B2B providers are positioned in the development of robo advisory services and what they offer.
  • How robo advisors should adopt their strategies to appeal to different segments such as Millennials, baby boomer investors approaching retirement, and high net worth individuals (HNWIs).
  • Which robo advisors provide specialized options such as micro-investing, rewards schemes or hedging strategies, and in what manner.
  • What the impacts of new technologies are, such as the use of artificial intelligence for client interaction and narrative generation on the robo advisor model.
  • How the future of digital success will look for robo advisors.
  • Appendix containing data on the web presences of more than 70 robo advisors alongside the digital customer journey process.
  • And much more.

>> Click here for Report Summary, Table of Contents, Methodology <<

Analyzed robo advisors in this report include:

North America: Acorns, Asset Builder, Betterment, Blooom, Bicycle Financial, BMO SmartFolio, Capital One Investing, Financial Guard, Flexscore, Future Advisor, Guide Financial, Hedgeable, iQuantifi, Jemstep, Learnvest, Liftoff, Nest Wealth, Personal Capital, Rebalance IRA, Schwab Intelligent Portfolios, SheCapital, SigFig, TradeKing Advisors, Universis, Wealthbar, Wealthfront, Wealthsimple, Wela, Wisebanyan

Europe: AdviseOnly, Advize, comdirect, Easyfolio, EasyVest, ETFmatic, Fairr.de, FeelCapital, Fiver a Day, Fundshop.fr, GinMon, Investomat, KeyPlan, KeyPrivate, Liqid, Marie Quantier, Money on Toast, MoneyFarm, Nutmeg, Parmenion, Quirion, rplan, Scalable Capital, Simply EQ, Sutor Bank, Swanest, SwissQuote ePrivateBanking, True Potential Investor, True Wealth, Vaamo, VZ Finanz Portal, Wealth Horizon, Wealthify, WeSave, Whitebox, Yellow Advice, Yomoni, Zen Assets.

Asia-Pacific: 8 Now!, Ignition Direct & Ignition Wealth, InvestSMART, Mizuho Bank Smart Folio, Movo, Owners Advisory, QuietGrowth, ScripBox, StockSpot

Here's how you get this exclusive Robo Advisor research:

To provide you with this exclusive report, MyPrivateBanking has partnered with BI Intelligence, Business Insider's premium research service, to create The Complete Robo Advisor Research Collection.

If you’re involved in the financial services industry at any level, you simply must understand the paradigm shift caused by robo advisors.

Investors frustrated by mediocre investment performance, high wealth manager fees and deceptive sales techniques are signing up for automated investment accounts at a record pace.

And the robo advisor field is evolving right before our eyes. Firms are figuring out on the fly how to best attract, service and upsell their customers. What lessons are they learning? Who’s doing it best? What threats are traditional wealth managers facing? Where are the opportunities for exponential growth for firms with robo advisor products or models?

The Complete Robo Advisor Research Collection is the ONLY resource that answers all of these questions and more. Click here to learn more about everything that's included in this exclusive research bundle

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This is why driving in the US and France is completely different

Sat, 02/18/2017 - 4:57pm  |  Clusterstock

Last year, I spent a few weeks in France.

It was far from the first time that I'd been there, but it was the first I'd ever driven in the land of the Gaul.

Intellectually, I knew it would both the same and different from driving in the US. For starters, in France, you drive on the right side of the road.

And I also knew that parking in Paris would be challenging, but that along the autoroutes outside the city, there would be convenient places to stop for snacks, coffee, or even a nice dinner.

I knew that the mix of vehicles on the roads would be different. As in: no big SUVs or pickups.

But wow, was I ever ill-prepared for one major difference.

SEE ALSO: We checked out the Indian alternative to Harley-Davidson that's fueling a new American motorcycle rivalry

Hatchbacks!

Hatchbacks to the left of me ...

... and hatchbacks to the right!

See the rest of the story at Business Insider

Here's the most important imported good in every state

Sat, 02/18/2017 - 4:45pm  |  Clusterstock

International trade is an important part of the US economy.

The US Census Bureau keeps track of state-by-state international trade statistics. Using its data, we looked at the biggest imported good as measured by 2015 dollar value in each state and DC.

SEE ALSO: Here are the fastest growing states in the US

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There's a key risk in Europe that everybody is missing

Sat, 02/18/2017 - 4:00pm  |  Clusterstock

Upcoming European elections, especially those in France and Germany, have many Wall Street economists on edge as the wave of populism sweeps the globe.  

For many, the focus is on whether there is a path to electoral victory in the likes of Marine Le Pen of the right-wing populist National Front party in France, or the far-right Alternative for Germany (AfD) party that has made gains in the wake of the migrant crisis and Brexit victory in the UK. 

What people aren't paying enough attention to however, is the impact that these populist parties can have even if they don't win. 

The European project is increasingly being questioned, said Schroder's Global Head of Multi-Asset Allocation Johanna Kyrklund, who is based in London, in an interview with Business Insider

"If you take the example of the UK, we didn’t need the UK Independence Party to win the election for us to end up with a referendum and leaving Europe ... so extreme parties can impact policies even without winning elections, particularly when you are dealing with coalition politics which is often the case on the continent."

She notes that the central scenario is that the establishment candidates will win, but she believes that the gaining popularity of more populist movements will cause a "shift in the center of gravity in Europe."

For example, even if Le Pen doesn't win the French election in May, the sheer number of her supporters will undoubtably influence the policy of the winning party. 

"What tends to happen is that when you start getting more extreme parties doing well, some of their policies then get adopted by the more mainstream parties in an effort to support their popularity," Kyrklund said. "So that’s why we’re worried." 

SEE ALSO: A top investment expert at a $487 billion fund on her outlook for 2017, Europe and Trump

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David Tepper's Appaloosa just dropped about $1 billion on 4 pharma stocks (PFE, TEVA, MYL, AGN)

Sat, 02/18/2017 - 3:51pm  |  Clusterstock

David Tepper's Appaloosa went big on pharma stocks in the fourth quarter. 

The fund took big new positions in Teva ($183 million), Pfizer ($156 million), and Mylan ($125 million) in the final three months of the year, according to a 13F filing. They were the fund's biggest new positions in the period. 

In addition, Appaloosa raised its stake in Allergan by 250%, increasing its position by around 3 million shares to a stake worth $894.9 million. The additional shares are worth around $660 million, and Allergan is now the firm's top holding. 

The combined investment in the three new pharma positions and the increased Allergan stake adds up to around $1 billion.

The quarterly filing, called a 13F, lists the long stock positions of investment firms. The positions are current as of 45 days ago, so it is possible that Appaloosa has since changed its positions. 

Bloomberg analyzed the data based off of a regulatory filing that the firm filed February 14. According to the 13F, Appaloosa's biggest moves in the fourth quarter were:

  • A new position in Teva valued at $183.2 million
  • A new position in Pfizer valued at $156.2 million
  • A new position in Mylan valued at $124.9 million
  • Appaloosa increased his position in Allergan to $894.9 million

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A Wall Street performance coach who's consulted on Showtime's 'Billions' says too many people have the same misconception about success

Sat, 02/18/2017 - 2:30pm  |  Clusterstock

For some of Denise Shull's clients, being in a slump might mean losing millions of dollars of other people's money.

Shull is the founder of the ReThink Group, a performance coaching group that specializes in clients on Wall Street. She's also one of the inspirations for Wendy Rhoades, the in-house psychiatrist at the fictional hedge fund at the center of Showtime's hit show "Billions."

Shull studied the neuropsychology of unconscious thought at the University of Chicago and spent 15 years as an equities trader. They are two worlds she combined when she started ReThink in 2003, putting her own spin on the niche market of Wall Street performance coaching, a path paved by the late psychiatrist Ari Kiev, who was employed by Steve Cohen's hedge fund SAC Capital.

Perhaps the most defining characteristic of Shull's approach is that nearly all of us, regardless of what industry we are in, have a misconception about how the mind works and thus how we can recover from failure: We think we can will ourselves to success.

"The conventional wisdom on feelings and emotions is just wrong," she told Business Insider.

Shull thinks many people have assumptions based on an outdated theory of the "triune brain," which basically says emotions, thoughts, and basic functions are handled separately within the brain; the reality, she says, is that all three of these roles are related in brain mechanics.

Too many people, she said, think that "if we have a plan and that we're disciplined then we'll be able to do the things that we want. ... It doesn't work like that."

It's why Shull has clients in the first place, she explained. The clients know that they are underperforming and they see their mistakes. But no pep talk from a manager or colleague and no Stoic denial of feelings can get them back to their peak.

Instead, she recommends her clients — and anyone else struggling through a slump — identify and name the feelings they are attaching to the weaknesses causing them to fail, and dive right in. By embracing these feelings, her clients can come to understand them, strip them of power, and then replace them with desired emotions. The thoughts follow the feelings, she insists, counter to what people often think.

"Sometimes I feel like I'm just going to gag, if I have to read 'mental toughness' one more time," she said. "Like ugh, just being tough doesn't get you the result you want. It fails you at the worst possible moment. ... And then all those feelings come crashing in and cause you to be self destructive or not perform up to your potential."

SEE ALSO: A Wall Street psychologist who's consulted on Showtime's 'Billions' outlines 5 truths of human behavior all her clients must face

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BAML: This is the most overcrowded trade

Sat, 02/18/2017 - 2:19pm  |  Clusterstock

The dollar is hugely overvalued. 

According to the Bank of America Merrill Lynch Global Fund Manager Survey out on Tuesday, a higher percentage of investors in February believed the dollar is overvalued than in more than a decade.

According to the results, 41% of fund managers believed that the "most crowded trade" is being long the US dollar, followed by 14% citing short government bonds and 13% long US/EU corporate bonds. 

The BAML Fund Manager Survey questioned 210 investors with a combined $632 billion in AUM. 

Many forecast a continuing rally in the dollar in 2017 due to higher interest rates (the Fed indicated three rate hikes this year in its December projections), increased government spending, and potential changes in trade policy. 

While this may be true, investors need to "avoid groupthink" and be wary of overcrowded trades, according to former GLG Partners fund manager Raoul Pal in an interview with Business Insider.

According to Pal, avoid the herd. "Look for other sources of return so they’re not so crowded as everybody else's because those are the ones where the maximum risk lies."

If the bets don't play out and there's a reversal, even a short-term one, "it can be very painful if too many people are involved in a certain trade."  

SEE ALSO: BAML: Investors around the world are freaking out about Trump's policies

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Here's why Snap is playing it safe with investors

Sat, 02/18/2017 - 2:13pm  |  Clusterstock

Snapchat executives hit the road on Friday to lure investors into what could be the biggest tech-sector stock offering in years. 

The schedule of meetings will take them to London on Monday, and New York on Tuesday, and eventually across the US. And if it's like other high-profile tech deals of recent years, they'll draw a standing room only crowd of analysts and fund managers looking to get a feel of what the buzz is about.

Already, though, Snap Inc. has raised some eyebrows on Wall Street. After people close to the company floated the idea that it would be valued at up to $25 billion — for months — it hits the road with a price range that puts its maximum value at closer to $22 billion.

It's not a massive difference, but it was enough to raise the question of what happened. There are plenty of reasons for investors to be skeptical of the company's disappearing message app. One is simply that its user base is young, and that means plenty of decision makers on Wall Street won't even understand what it is. 

Snap knows this and one video posted on its website for investors Friday is simply a lesson on how the app works. People close to the company said that preliminary meetings with investors and analysts, late last year, included this lesson. 

Then there's the question of its valuation. Even if $22 billion is lower than it might have sought, the company only reported $400 million of revenue in 2016 and no profits. Also, it has a share structure that means investors paying that will get no say in how it is run. 

So is that all getting baked into the price already? Maybe. Reuters reported that one reason for the slightly lower valuation reflected feedback from those preliminary meetings. 

Playing it safe 

One person close to the situation told Business Insider that Snap is playing it safe with the intention of going higher as soon as demand merits. Conversely, asking for the full $25 billion and being forced to roll it back if investor demand isn't high enough would be a worse outcome that taints the company's trading debut. 

The company said Thursday it was seeking to price shares at $14 to $16, but this person — who asked not to be identified discussing the situation — said the only acceptable price, in reality, will be $16 per share or more. 

This person expects Snap's order book to be oversubscribed, meaning there will be demand for more shares than it is selling.

"If you look at Twitter, Facebook, or Alibaba, there's a pretty consistent playbook that many companies run," a pre-IPO investor in Snap, who also asked not to be identified, told Business Insider. "They come up with range that's very attractive and then they walk it up."

A spokesperson for Snap declined to comment.

So is it worth it?

Among the risks investors are likely to focus on is a slowdown in user growth. In the fourth quarter, for example, Snap says it had 48% more users than a year earlier. That's the slowest growth rate for any of the 12 quarters for which it reported numbers. 

"The deceleration in user growth is a clear indicator that Snap is losing its snap," said Lee Bressler, portfolio manager at Carbon Investment Partners, a small hedge fund. "Instagram's stories feature is a direct competitor and will continue to take market share. This could be the next Twitter, or worse, Myspace."

Twitter, which went public in 2013, is struggling to grow its user base and investors who held the stock for the last three years have been punished for it: at about $16 a share currently, the stock is well below its IPO price of $26. 

Spiegel is set to respond to concerns around its slowing user growth in investor meetings. As Business Insider previously reported, he plans to emphasize quality of engagement over quantity of users. He wants his existing users to really enjoy the product and is focused on innovating to make it more usable. 

Part of that means users must have higher-end smart phones. Snapchat works best on iPhones, and while some problems persist on Android and other phones, Spiegel says he will not dilute the product to make it work on every phone.

So unlike Facebook, which has nearly 2 billion users around the world, Snap will not focus on non-iPhone-using customers in places like the developing world because those markets are not easily monetized. The logic is that advertisers want to reach North America and develop Europe rather than the rest of world. 

In the company's roadshow materials, it said its biggest revenue opportunity is the growing budget for worldwide mobile advertising, which could reach $196 billion by 2020 from $66 billion currently.

Snap's business is to "create the best camera platform so we can drive engagement and monetize that engagement through advertising," Chief Strategy Officer Imran Khan said in the video.

Growing revenue

Focusing on revenue growth makes sense for Snap's executives because of the blistering pace at which sales are increasing. The company sold its first ad at the end of 2014, but really started to monetize the business with the hire of Khan in 2015. His team grew revenues from $58.7 million in 2015 to $404.5 million in 2016. Last summer, the company launched Snapchat Partners, an advertising API, to expand the advertising business.

Consumer tech investors Goodwater Capital estimate Snap will grow revenue to $1.10 billion in 2017, $1.94 billion in 2018, and $2.75 billion in 2019. They estimate the company will turn its first profit in 2020.

Certainly, the company's existing backers are betting that the stock will be more like Facebook — which is up 250% since its 2012 debut — and less like Twitter. 

Of course, Facebook's stock famously tanked in the months after its debut, losing about half of its value and raising questions about its pricing, though the company has now far surpassed that initial valuation. 

"While on an absolute basis, the valuation appears high from an investor's risk/reward perspective, I think Snap becomes very much the next Instagram, or possibly bigger," the existing Snap investor, whose fund has a $150 million stake in the company, told Business Insider.

Instagram, a photo-based social media network, is owned by Facebook. 

Facebook has "consistently tried to kill Snapchat off," the investor added. "It's a risk, but what helps me sleep well at night is that Snap has consistently out-innovated Facebook for five years and I think that is likely to continue."

SEE ALSO: SNAP'S ROADSHOW: Snapchat executives explain why investors should buy into their $22 billion IPO

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Billionaire Chase Coleman's Tiger Global made a nearly $500 million bet on Fiat (FCAU)

Sat, 02/18/2017 - 1:45pm  |  Clusterstock

Billionaire Chase Coleman's Tiger Global made a big bet on Fiat Chrysler last quarter.

The $20 billion investment firm took a new position in Fiat valued at $481 million in the final three months of the year, according to Bloomberg's analysis of a regulatory filing on February 14. It was the fund's biggest new position in the quarter. 

The quarterly filing, called a 13F, lists the long stock positions of investment firms. The positions are current as of 45 days prior, so it is possible that Tiger Global has since changed its positions. 

According to the 13F, Tiger made the following moves during the fourth quarter:

  • It increased its stake in Priceline by 36%, holding a $1.84 billion stake at the end of the quarter
  • It increased its stake in JD.com by 37%, holding a stake worth $1.16 billion
  • It took a new position in Fiat valued at $481 million
  • It took a new position in Alphabet valued at $147.5 million
  • It took a new position in Microsoft valued at $131.6 million

Tiger Global Management invests in private and public markets and manages about $20 billion firmwide. The firm managed $5.9 billion in hedge fund assets as of mid-year 2016, according to the Hedge Fund Intelligence Billion Dollar Club ranking. 

SEE ALSO: Some of the smartest minds on Wall Street are sounding the alarm on the Trump bump

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Managers at a $1 trillion asset manager say investors are dangerously underplaying 3 things (PRU)

Sat, 02/18/2017 - 1:21pm  |  Clusterstock

  • Investors are focusing on upcoming European elections as risks, but the French outcome matters much more than what happens in Germany, the Netherlands, or Italy. 
  • Concerns about China's economy and the Federal Reserve's interest-rate decisions were blamed for a stock market sell-off last year
  • They could make a comeback as big risks, according to leaders at PGIM

2016 was not a great year for forecasting. 

The UK's decision to leave the European Union, and President Donald Trump's win despite what the polls showed, humbled many people who were sure that the opposite outcomes would happen. 

With that in mind, managers at PGIM, the group of Prudential's investment management businesses that oversees $1 trillion in assets, discussed events that are being underplayed but have a real possibility of happening and should be more worrying right now. 

The Fed

For Mike Lillard, the chief investment officer at PGIM Fixed Income, the Federal Reserve's response to faster economic growth could be a risk during the next couple of years. 

"Our concern would be that over the next couple of years, the Fed overtightens," Lillard said at a panel discussion in New York on Wednesday. 

In congressional testimony on Tuesday, Fed Chair Janet Yellen said raising interest rates too slowly could destabilize financial markets and trigger a recession. But the reverse — hiking too quickly — is the more problematic scenario, as Business Insider's Pedro da Costa also argued

Lillard said the risk of a US recession could escalate three years from now. Despite the prospects of higher interest rates from the Federal Reserve, he still finds rates attractive. But he is looking to lower his credit risk because there are probable events that markets have not fully priced in.

France

The European elections are being lumped together as a general risk to markets, but France is the one that really matters, according to Eric Adler, the CEO of PGIM real estate. 

Marine Le Pen, the leader of the nationalist Front National, supports a referendum on France's membership in the European Union. Her speech early in February outlining her vision for France unnerved financial markets in the region.

"The idea that Marine Le Pen could win will blow the euro up," Adler said, referring to the geographical area. He said with the UK's vote to exit the EU, Germany and France are really the only other two countries holding the union together.

"If France were to pull out because of a referendum that's instigated by Marine Le Pen and her victory, I think that ends the euro

If France were to pull out because of a referendum that's instigated by Marine Le Pen and her victory, I think that ends the euro.

, which really plunges everything into uncertainty globally at least for a while," Adler said. 

This is not his base case, however. 

"I'm really focused on it because I've been wrong twice in 2016 on things that weren't supposed to happen," he added.

On Thursday, the betting odds showed Marine Le Pen had a 34% chance of winning, versus 43% for Emmanuel Macron, her leading centrist opponent, according to Bloomberg. 

Ed Campbell, the portfolio manager for QMA, a business of Prudential Financial, said Le Pen's odds are similar to Trump's on election day. 

China

"With all the focus on US politics and the spread of populism across Western democracies where we had Brexit, we've had Trump, and now we're concerned about the European political calendar, I think China political risks have fallen off the radar," Campbell said. 

Last year, Chinese officials unleashed major stimulus measures to boost the economy, cutting interest rates and increasing spending. But investors have become complacent about risks to China's economic growth, especially in the run-up to the Communist Party of China's congress that could create a leadership transition, Campbell said.

 "I think the risk is that we see another China-related growth scare in 2017," Campbell said. He recalled the stock market sell-off in January 2016 that was partly attributed to instability in China. 

SEE ALSO: A credit head at the world's biggest investor breaks down why investors are pouring into one of the riskiest markets

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Credit cards are going the way of fax machines

Sat, 02/18/2017 - 1:01pm  |  Clusterstock

The modern smartphone is a remarkable device. A single device that fits in your pocket can do all the tasks that once required cameras, camcorders, GPS devices, watches, alarm clocks, calculators, and even TVs.    

But the next change might be the most radical of all—it could eliminate the need to carry cash and credit cards. 

The growing importance of the smartphone as the go-to computing device for every digital activity is having a profound effect everywhere you look, but it’s only the biggest story among many exciting developments in the world of payments:   

  • Apple Pay was first out of the gate, but now mobile wallets are everywhere you look—Android Pay, Google Pay, Chase Pay and even Walmart Pay are making smartphones a real alternative to carrying credit cards. And the potential for mobile wallets to limit a merchant’s fraud liability could help them really take off in acceptance for small businesses.   
  • As consumers move more purchasing online, gateway vendors that can act as a front-end processor for online businesses are seeing explosive growth.   PayPal-owned Braintree grew 111% YoY in the number of cards on file in Q4 2015, while Stripe and Klarna now have multi-billion dollar valuations.
  • Mobile Point-Of-Sale (mPOS) startups like Square and ShopKeep have pioneered a whole new payments niche—accepting payments via tablets and smartphones.   Coupling their transactions capabilities with new apps can revolutionize a small business’ inventory management, marketing, loyalty and even payroll.   
  • Mobile Peer-to-Peer payments in the U.S. are forecast to grow from $5.6 billion in 2014 to nearly $175 billion by 2019 as consumers increasingly skip the hassle of writing a check or going to an ATM.   But smartphone vendors like Apple could cripple the dominant player of 2016 (Venmo) if they make a serious push to own the space.   

If your job or your company is involved in payment processing in any way, you know how complex this industry is. And you know that you simply can’t understand where the next big digital opportunities are unless you know the key players and roles in each step of the payments “supply chain:”   

  • Acquirers
  • Processors
  • Issuers
  • Card Networks
  • Independent sales organizations and merchant service providers
  • Gateways
  • Hardware and software providers

Fortunately, managing analyst John Heggestuen and research analyst Evan Bakker of BI Intelligence, Business Insider's premium research service, have compiled a detailed report that breaks down everything you need to know—whether you’re a payments industry veteran or a newcomer who is still getting a basic knowledge of this complex world.

Among the big picture insights you’ll get from this new report, titled The Payments Ecosystem Report: Everything You Need to Know About The Next Era of Payment Processing:

  • The 5 key events of 2015 that have set up 2016 as a watershed year for the entire payments ecosystem. 
  • The basics of traditional card processing from the start of the process through to the very end.    
  • Why new players and innovations like prepaid cards, store cards, and PIN debit transactions are gaining market share and creating new opportunities.   
  • The effects—good and bad—of the transition to new mobile payment methods.   New players and old have surprising threats and opportunities in areas as varied as carrier billing, remittances, wearables, and more.   

This exclusive report takes you inside these big issues to explore:

  • The critical steps in credit card transactions and how they are changing.
  • The six major types of organizations involved in the payments ecosystem.
  • The significant differences for industry players who operate closed-loop networks and offer prepaid cards.
  • The challenges and opportunities facing hardware and software providers for the payments sector.   
  • The 8 reasons why mobile wallets are growing so fast and how they will disrupt all aspects of the mobile ecosystem.    
  • The exciting possibilities ahead in fast-growing payments subsectors like remittances, connected devices and mobile P2P payments.   
  • And much more.

To get your copy of this invaluable guide, choose one of these options:

  1. Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
  2. Purchase the report and download it immediately from our research store. >> BUY THE REPORT

The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the payments ecosystem.

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A successful entrepreneur opened a new meditation studio in NYC to cash in on a $1 billion market

Sat, 02/18/2017 - 12:35pm  |  Clusterstock

Meditation has gone main stream. The now $1 billion dollar industry has grown increasingly popular with Wall Street bankers, and it's also moved into the tech world, with a plethora of apps that guide you through practices, such as Headspace.  

Khajak Keledjian, the former owner of Intermix — a women's luxery clothing store that he sold to Gap for $130 million in 2013 — has been benefiting from meditation since 2007, after a friend of his who is a hedge fund manager, introduced him to the practice. Now, Keledjian wants to help spread the word.

His recently opened, New York City based meditation studio, Inscape, is as its name implies, an escape from the hustle and bustle of the city. Located in the Flatiron district, Inscape is a place for those who want to explore meditation by taking guided, group classes. 

Although I've been aware of meditation since I was a child, I have never fully engaged in a practice. This was my first full attempt to go into a meditative state. Below, my experience at Inscape. 

SEE ALSO: Obama just took a luxurious trip to Richard Branson's private island — here's where other US presidents have vacationed

Inscape's lobby is set up a lot like a yoga studio — products such as books and candles are available to purchase, and lockers and restrooms are in the back.

Teachers quietly greet guests at the front — everything feels serene and calm from the moment you walk in. My class's facilitator, Tiffany Rotach, kindly checked me in and gave me a quick tour.

I'd recommend changing into something comfortable — to get the most out of my 33 minute session, I wore yoga pants and a loose sweatshirt.

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 An Inscape antendee stands outside the meditation Dome, near the lockers. 



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Tesla has sent investors on an epic roller coaster ride for years — look back at the craziest moments (TSLA)

Sat, 02/18/2017 - 12:24pm  |  Clusterstock

Tesla is headed into fourth quarter and full-year 2016 earnings next week with arguably the biggest head of financial steam in the company's history. 

A surprise profit in the third quarter last year, coupled with Donald Trump's win in the election and the assumption that an America-first manufacturing policy favors Tesla, has sent shares on an epic rally. The stock has risen as much as 50% of the past three months, surging toward $300 and ending last week above $270.

Tesla has watched its stock soar in the past, only to reliably plummet — or, if not that, the revert to trading levels that don't register a $40-billion-plus market cap, right up their with the Ford Motor Company, but something close to $30 billion, which in the assessment of many market pros is, frankly, bonkers for a carmaker that sold only about 80,000 vehicles in 2016.

The roller-coaster ride that is Tesla investing has certainly been intense, but over the past two years some interesting new patterns have developed. It's also worth taking into account that Tesla financial reporting and market value have gotten far more complex with the 2016 acquisition of SolarCity for just over $2 billion, a price that also bought Tesla billions in debt. 

I thought it might worth it to take a look back at Tesla's history — a story in stock charts:

SEE ALSO: The idea that a unionized Tesla factory will be a great labor win is an overstatement

We'll start with the all-time chart, showing Tesla's share-price history since its 2010 IPO, when the company was trading below $20.

As you can see from the chart, Tesla was basically flat for several years after the 2010 IPO. In 2008, the carmaker had endured a near-death experience, and in the lead-up to the IPO and afterwards, it was selling only one car, the original Roadster. 

The game plan at this point was for CEO Elon Musk and his team to keep the lights on long enough the roll out Tesla's first built-from-scratch car, the Model S sedan.

That happened in 2012, and for 2013, Motor Trend named the Model S it Car of the Year. At this point, the stock took off.

And as you can see, if you bought Tesla right after the IPO and held on, you'd be looking at an 1,000%-plus return today.



The Model S launch was a defining event for Tesla. This would mark the beginning of Tesla's Wall Street story, the tale of a rapid-growth tech company. But ironically, it would also mark the moment at which Tesla started to become a car company.

Over the past three years, however, Tesla's stock story has been one of extreme volatility: spikes and swoons.

Because Tesla took off so fast as a stock and quickly achieved an impressive market cap for a company that, in 2013, was selling almost no cars (even if the ones it was selling cost more $100,000 apiece), a stable price wasn't in the picture. 

Investor confidence would soar, then collapse, with sentiment turning on ever news event, product announcement or delay, quarterly earnings report, and market-moving Muskian tweet.

Rapid run-ups were followed by jerky declines. Jagged recoveries presaged vertiginous descents. At one point, Musk himself said that the company was overvalued. Unlike the rest of the industry, with its slow, predictable stock behavior for publicly traded carmakers, and with its long business cycles, Tesla was behaving more like a Silicon Valley tech company.

Analysts fixated on the pace of deliveries as the best indicator of how Tesla was performing and whether there was sufficient demand for Tesla electric cars, in a market that otherwise didn't seem to want them, to justify the monumental valuation. Eventually, Tesla began reporting quarterly sales, mainly to give Wall Street something to go on.



See the rest of the story at Business Insider

One of Wall Street's top equity analysts reveals his biggest fear for 2017

Sat, 02/18/2017 - 12:00pm  |  Clusterstock

Business Insider asked the head of US Equity Strategy at JP Morgan what keeps him up at night.

His answer was loud and clear: An ongoing trend of US dollar strength.

"The dollar continues to strengthen," said Dubravko Lakos-Bujas in an interview with Business Insider. The dollar on a global trade weighted basis has increased by about 20-25% over the course of the last 2-3 years, he pointed out. And according to Lakos-Bujas, further strengthening in the dollar could come on the back of President Trump's corporate tax reform proposals like a border tax adjustment.

"If that trend persists, you could see the global economy getting further pressurized. Keep in mind that 60% give or take of the global economy directly or indirectly is linked to the dollar. The dollar plays a very important role." 

After the dollar, Lakos-Bujas is worried about higher interest rates and trade. 

"There’s a good amount of leverage in the system, especially if you look at corporates," he said. According to Lakos-Bujas, leverage in US corporates ex-financials is in line with all time highs back to the 2007 levels. "There’s less room for tolerating a significant amount of rate increases," as higher rates will make that corporate debt more expensive to pay back.

On the trade side, Lakos-Bujas looks toward the uncertainty around the US adopting significant changes on border taxes and other restrictive trade measures that could end up resulting in "significant" retaliatory effects from big trading partners like China. 

So what can investors do to get a good night's sleep? 

"If you believe that a strong dollar and rising rates are going to continue tightening conditions, don’t be surprised if at some point the Fed turns marginally more dovish," said Lakos-Bujas. "This means that gold and gold miners might be an interesting hedge to an existing portfolio."

SEE ALSO: JPMorgan's head of US equities on the dollar, market volatility, and where investors should put their money in 2017

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A high-profile hedge fund sent a letter explaining all the reasons it lost money last year, and why it is going to do better this time

Sat, 02/18/2017 - 11:35am  |  Clusterstock

A high-profile hedge fund founded by a Steve Cohen acolyte sent a letter to investors explaining all the reasons for its underperformance.

In a January investor letter, Folger Hill's Sol Kumin set out why his firm's flagship fund dropped 17.5% last year. Among the cited reasons: a difficult environment for stock pickers, hedge fund "crowding" and the US election.

"I am truly sorry that we have not delivered better results thus far to our investors who put their faith in me," Kumin wrote in the letter, a copy of which was reviewed by Business Insider. "I can assure you that we are committed to fighting back in 2017."

Folger Hill faced concerns over investor redemptions last year. At the same time, two of its portfolio managers have recently left for competitors, with one leaving as recently as last week, Business Insider reported.

The firm's flagship fund, Folger Hill Partners LP,  fell 17.5% last year net of fees, compared to a 12% rise in the S&P 500, according to the letter. In the fourth quarter alone, the fund fell 10% compared to a 3.8% gain for the S&P 500. 

"[T]he Fund’s net short positioning (1.7%) served as a material headwind, as U.S. equity markets generally moved higher throughout the year," Kumin wrote in the investor letter. "In addition, our short book performance was particularly poor following the U.S. election results in November."

The firm also chose the wrong sectors to invest in, Kumin wrote, focusing on "out of favor" sectors like healthcare, consumer staples, and technology, media, and telecoms rather than sectors "with greater overall momentum" such as energy, financials and industrials.

Still, the firm expects a turnaround this year. "We believe the U.S. election marks a major historical turning point for the global economic system and could create a target rich opportunity set, especially for shorting stocks," Kumin wrote.

"We believe moving from a monetary to fiscal policy driven economy will favor fundamental security selection more than during the Quantitative Easing era and should reward active investment managers in the years ahead."

Kumin, an ex-SAC Capital chief operating officer, launched Folger Hill in 2014. The firm lost about a third of its assets last year, Reuters reported. The firm managed about $1 billion as of mid-2016, according to the Hedge Fund Intelligence Billion Dollar Club, and assets fell to about $600 million just three months later, according to Reuters. Its current assets under management were not clear. 

A spokesman for Folger Hill declined to comment.

SEE ALSO: Another portfolio manager has left struggling hedge fund Folger Hill

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The 2 most important money rules to follow in your 20s, according to a bestselling author who's written about finance for nearly 3 decades

Sat, 02/18/2017 - 11:15am  |  Clusterstock

Your 20s are a time for living it up. But if you're the type who tends to get a little too reckless when it comes to spending money, you'd be wise to establish some simple ground rules now. No doubt you'll thank yourself later.

In a recent Facebook Live interview with Business Insider, personal finance writer Beth Kobliner laid out the two most important things to do financially in your 20s.

An updated version of Kobliner's bestseller "Get a Financial Life: Personal Finance In Your Twenties and Thirties" will be released in April, and her new book, "Make Your Kid a Money Genius (Even If You're Not): A Parents' Guide for Kids 3 to 23," is available now.

Here are her hard and fast rules for managing your money as a 20-something:

Don't fall into credit card debt

Though not all debt is bad — student, home, and auto loan debt, for example, could help you get ahead financially — credit card debt can ruin your credit score and affect your job, insurance, and real estate prospects for years to come.

"Basically, in your 20s, you want to not get into credit card debt," Kobliner told Business Insider. "Because remember, if you put something on a credit card that's charging you 18% [interest], that is the equivalent of earning 18% if you pay it off. But if you're paying out 18%, you're losing a lot of money every month," she said.

But if you do find yourself slipping into the trenches of debt after an ill-advised shopping spree (or three) or an unexpected medical emergency that your savings wasn't equipped to cover, pay it off as soon as possible, Kobliner says.

Check out her handy debt-repayment chart to figure out how the number of monthly payments you'll need to kill your debt based on how much you're paying each month and your interest rate.

Save for retirement

Research shows that while millennials expect to fund their retirement largely through savings and investments, only 42% of millennials have actually started saving. It may seems eons away now, but the only way you're going to live comfortably in retirement is by preparing ahead of time.

"Put money in a Roth IRA ... that is a simple thing to do as much as you can," Kobliner says, adding that you don't even have to contribute a ton of money, because as long as you start early, compound interest will take over. And if your company offers a 401(k) plan, take advantage of it. In some cases, employers will even offer a contribution match — free money.

"I wrote the first version of my book 'Get a Financial Life' 20 years ago, and I have people coming over to me now in their late 50s, early 60s, saying 'You know what, I listened to you and now I have a pile of money,'" she said. "So definitely do that."

Check out Business Insider's full Facebook Live interview with Kobliner:

SEE ALSO: These 8 simple rules are the Sparknotes version of everything you need to know about personal finance

DON'T MISS: The No. 1 money lesson to teach your kid, according to a mom of 3 who's been writing about finance for nearly 30 years

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The new Acura NSX reset our expectations of what a supercar can be

Sat, 02/18/2017 - 10:41am  |  Clusterstock

Let's cut right to the chase.

I was never a fan of the first-generation Acura NSX. In fact, I could rightly be called a critic of the car, introduced in 1990 and produced until 2005. I thought it was boring. A guy who lived down the street from me in Los Angeles owned one and parked it on front of his house. I never once paused to look at it.

Yes, I know the car was a designed by the legendary Pininfarnia. Didn't matter. I didn't care.

But the NSX had its fans, and plenty of them. So after a hiatus, Honda (Acrua's parent company) completely rethought the NSX and rolled out a second-generation of the car. I saw it for the first time at the 2015 New York auto show. My reaction was "Meh." 

Later, I saw different versions of the new NSX. More meh. Images of the interior began circulating. Meh.

Then Acura kindly let us borrow the NSX for a few days.

Oh. My. God. 

It was almost head-warping how quickly my mind was changed after just a few minutes with the actual NSX, live and in the flesh, sitting behind the wheel, driving the thing. 

It was hypnotically beautiful. It was fast and responsive. It was breathtakingly gorgeous. 

The new NSX flat-out ravished me. I can't remember having such a profoundly rapturous reaction to a car. I could barely speak. Everything I had thought about the car before was wrong, so wrong.

Let's take a closer look at why I was an idiot to ever doubt the new Acura NSX:

Photos by Hollis Johnson.

SEE ALSO: The new Maserati Levante SUV has raised the luxury bar

The NSX landed in New York City during a spell of lousy weather. It didn't matter. Our photographer, the intrepid Hollis Johnson, couldn't stop drooling over the $160,000 car, which wears wet stupendously well.

Hollis was fascinated with how rain beaded elegantly on the luminous, deep-red surface of the NSX.

I thought it looked like something out of "Blade Runner." Really, better than something out of "Blade Runner."

See the rest of the story at Business Insider

9 crazy concepts cars already unveiled in 2017

Sat, 02/18/2017 - 10:37am  |  Clusterstock

Concept cars are only getting crazier.

Automakers use concept cars as a way to showcase their vision for future production models. Sometimes, the cars are tame, though innovative, offering a realistic example of features to come. But more often than not, car makers pack concept cars with features you'll probably never see — at least not within the next decade.

Either way, concept cars offer a fun way to look at automakers' more creative side. Scroll down for the ones we've seen so far:

SEE ALSO: Porsche is building a stunning Tesla rival — here's everything you need to know

1. Fiat Chrysler unveiled a concept car geared for high-tech millennials at CES this year. The car isn't all that eye-catching purely from an aesthetic perspective. It's large, boxy, and heavy looking...

...But the car is really meant to showcase the tech millennials are looking for inside a car, FCA said. It's electric with 250 miles of range and gets just over 50% of its charge back in under 20 minutes with a DC Fast Charger.

It also comes with lidar and sensors to handle Level 3 autonomous driving, meaning it can handle urban environments, but still requires human oversight.

See the rest of the story at Business Insider

Germany's Vice Chancellor: We must 'respect' the Brexit vote and 'resist the temptation to treat Britain overly harshly'

Sat, 02/18/2017 - 10:11am  |  Clusterstock

Germany's Foreign Minister and Vice Chancellor Sigmar Gabriel said that while he "regrets" that Britain chose to leave the European Union in June last year, he and the rest of EU members should "respect it" and not punish the nation during negotiations.

"We should resist the temptation to treat Britain overly harshly - not out of pity but in our own interest,"said Gabriel at the Munich Security Conference on Saturday, as reported by The Daily Mail.

"We need Britain, for example, as a partner in security policy and I am also convinced that Britain needs us."

On January 17,  May outlined her negotiating stance for Brexit , which included a rejection of the Single Market and an end to the free movement of people, resulting in a so-called "hard Brexit."

May plans to trigger Article 50 before the end of March, which will start the official two-year negotiation period for Britain leaving the EU.

In February, Valdis Dombrovskis, the European Commission's vice president for the financial services sector, summed up the European Union's view on Brexit in one perfect sentence :

"Inevitably the will be some economic disruption by clearing out decades of economic integration. Unfortunately, it will be a situation where we will be spending lots of time and energy moving from Point A to Point B, when we already know that Point B is likely to be worse than Point A."

In the same month, French Prime Minister Bernard Cazeneuve and European Commission chief Jean-Claude Juncker warned Britain that the terms of any Brexit deal must not be better than full EU membership.

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How the ‘French Bill Gates’ Alexandre Mars plans to create a social giving movement

Sat, 02/18/2017 - 10:08am  |  Clusterstock

  • Alexandre Mars is a serial entrepreneur who has been dubbed the "French Bill Gates."
  • Since he started his first company at the age of 17, he says his goal has been to create a movement around charitable giving.
  • Mars now runs Epic Foundation, a non-profit that aims to ensure 100% of philanthropists' money reaches their charity of choice. Now it wants to encourage businesses to donate 1% of their profits to charity and launch a new platform to encourage non-wealthy donors to give to good causes. 

Ever since he was a teenager, Alexandre Mars has always wanted to create something for social good. The French serial entrepreneur turned philanthropist said he always pictured his life as a quest to fulfill that goal.

"You know you will have to battle hard and fight. But you will be successful. That's epic for me," the serial entrepreneur Alexandre Mars told Business Insider.

Mars is the founder of Epic Foundation, a non-profit aiming to improve charitable giving by ensuring that 100% of a donation actually reaches the people it is meant to reach.

Until now, it has targeted only wealthy people and companies. But in March, the foundation will launch a new platform called Epic Generation, to enable anybody to donate even small amounts to charity.

Mars fronts all the operational costs for Epic. The foundation was started in 2014 and now has 25 employees across five global offices.

Mars wants to create a global movement of social good

41-year-old Mars, made much of his wealth as a serial entrepreneur, creating over five online and mobile marketing companies. One of those he sold to Publicis Groupe and another to Blackberry.

His goal has always been to create a social good company, something he kept in mind when he was creating and selling companies. This led to French media referring to him as the country's Bill Gates, but Mars says he isn't as wealthy – although he doesn't disclose his net worth – and has always wanted to create a way to empower everybody to give to charity.

With the new platform, Mars wants to reach a younger millennial audience that he believes is one of the most socially engaged generations to have existed.

"We want to democratize giving. Maybe you don't have 50 grand for me, but you want to give 25 bucks," he said.

Epic goes through a careful process to select NGOs and social enterprises, all focusing on helping young people from the age of zero to 25-years-old, that will make up the shortlist from which donors can choose. Last year, 1,900 organizations applied to be a part of the foundation. Of those, Mars and his team selected only 10. At the time of the interview, he was in the middle of the selection for the 2017 batch.

"We behave like a venture capitalist. We have 45 data points to help us decide which organizations we'll select and we spend seven months vetting every social organization presented to us," he explained.

Epic doesn't disclose its donor sheet, but, according Fast Company, it includes executives from tech companies Vice, Facebook, and Giphy, as well as firms like L'Oreal and the supermarket chain Carrefour.

I was delighted to speak at The HEC Investment Banking and Private Equity Alumni Group event in London and share my views on entrepreneurship and philanthropy. I hope you will join the EPIC journey! Thank you for having me @AssociationHECAlumni! #hecalum

A post shared by Alexandre Mars (@alexandremars9) on Nov 10, 2016 at 1:20am PST on Nov 10, 2016 at 1:20am PST

As a larger share of younger people come into the workforce, Mars explained it's also important not just for the wealthy to give to social causes but for companies to participate in the movement.

"An organization can become the new Nokia or Kodak, not because they didn't see the wave of technology coming, but because they didn't see the wave of social disruption coming," he said.

Companies that are part of the Epic Foundation pledge 1% of their profits to social causes.

"The French Bill Gates"

Originally from the south of France, Mars grew up living in the United States and his home country. He attributes much of his success to his parents and multicultural background. Mars' father was a consultant and entrepreneur, something Mars said drove him to start over five companies. His mom, a former airline stewardess, was the one who instilled in him a social consciousness, Mars said. It's something he wants to pass on to his own children.

When Mars spoke to Business Insider in New York – his adopted home – the city was experiencing a blizzard, and he was returning from a homeless shelter with his kids.

In his home country of France, Mars was given the label of the "French Bill Gates" by Le Monde. Unlike the American one, Mars said he doesn't have the power to change laws in developing countries. His goal is to change the mindset of people and drive more social good.

Mars said he always knew he wanted to create something that would have a social impact: "When I was 20, I was sure that it would take me three years to become the next Bill Gates. It would be easy and fast."

He laughed at his own naivety: "As we all know, it's super hard to be successful. You work really hard, it takes amazing team and cunningness to get there."

It took him 21 years, somewhat longer than the three years he had envisioned.

Mars started his first company, a concert promotions agency, at the age of 17, after his parents had returned to France. Four years later, he started one of the first online marketing agencies in France, called A2X, while simultaneously launching his own venture capital firm, Mars Capital, in the United States.

"It was very hard at the beginning, I was 20 with a ponytail and a beard trying to explain to the decision makers that the internet will be the next big thing," he said.

His fourth startup would turn out to be the one to really put Mars on the map. He founded Phonevalley, which he built into the largest mobile marketing agency in Europe before selling it to the French advertising group Publicis, where it became the agency's mobile marketing division with him at the head.

In 2013, after his earnout finished, Mars left the holding company, and turned his focus to another startup he had started in parallel to Phonevalley. Called ScrOOn, it was a social media marketing service that allowed brands to manage their social media, at a time when social networks were still emerging.

"I'm bad at many, many things but what I'm good at is seeing the wave coming and being able to interpret that wave," Mars said. He sold ScrOOn to Blackberry in 2013 for an undisclosed amount.

After selling two of his companies, Mars decided to take a step away from tech startups.

For him, starting and selling companies was always a means to an end, with the goal to create something philanthropic.

"I had the skills from being an entrepreneur, I had the network from traveling the world to meet people, and now I finally had the money," Mars said.

Combining entrepreneurship and philanthropy

Mars and his wife then took their children out of school for a year and traveled the world, on what he called a "market research" journey. They visited both social organizations and met with donors to find the best approach.

Mars found people held back from giving to charities because of a lack of trust in them, an inability to track what happened with a donation, and donors' lack of knowledge when it came to choosing the right organization. With Epic Foundation, Mars set out to right that. The foundation puts a number of apps and tools at the disposal of donors through which they choose the charity they want to give to and track what's happening with their money.

For Mars, this allows him to do everything he would do as an entrepreneur.

"I still work a lot, even more than I used to," he said.

Another great session with our amazing Paris2024 'Sport & Society' team! @grandcorpsmalad @TonyESTANGUET @SBetsen @michelcymes and many more....

A post shared by Alexandre Mars (@alexandremars9) on Nov 5, 2016 at 3:36am PDT on Nov 5, 2016 at 3:36am PDT

Alongside Epic Foundation he runs his family office, called blisce/, through which he has invested in a number of large tech companies, including Spotify, Pinterest, and Alibaba prior to its IPO. He was also named the chair of the committee for the 2024 Paris Olympics bid, which he said, in an editorial for the Huffington Post France, was the first Olympic Games candidacy placing social issues at its heart.

Creating more social good is fundamentally at the core of everything he does. 85% of his time is dedicated to Epic Foundation.

"We're in this new era where purpose is everywhere. We're building a social good movement, it's why we didn't want to have a business model attached to it," Mars said.

"Epic is a startup, the goal for the future is to keep building new tools and open new offices, the only difference is we change lives and we don't make money."

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