The stark reality for Canadians today is that 46 percent of us are $200 or less away from financial insolvency at the end of the month, with 45 percent reporting that they will have to go deeper into debt in order to pay off their living expenses. Research has also identified a link between financial and mental health, with the most ‘financially vulnerable’ scoring lower on mental health measures — the bulk of which are shown to be women.
Enter PolicyMe, a Toronto-based life insurance resource platform; Quber, a Moncton-based financial app; altruWisdom, a Calgary-based financial education platform; and Zayzoon, an HRTech company operating out of Calgary. These Canadian startups were selected as part of the inaugural Innovate Financial Health Impact Accelerator, which grants each business $25,000, as well as access to over 70 mentors over a three-month period to help them grow their business.
PolicyMe uses a customer-first model algorithm that provides objective advice on life insurance coverage, provided free of charge and without up-selling.
The operation cuts out the broker because, as CEO Andrew Ostro notes, “the more [brokers] sell, the more they get paid.” PolicyMe’s advice is dependent on different inputs, and recommendations are done without incentives or bias. The company is currently working with a larger insurance company to build their own product to move from an advice-only operation.
PolicyMe has approximately 2500 monthly users, and in 2019, the company reported a 2000 percent growth in their life insurance policy sales over the previous year.
Making tough (but better) decisions
Three major life events can throw a person into a tailspin: the death of a family member or loved one, disability or divorce. You may be ill prepared, and that’s where companies like altruWisdom and Quber come in. Both startups are designed to help Canadians make better decisions using catered advice on life events (altruWisdom) and ‘money jars’ with daily challenges (Quber).
Quber started in 2016 with the goal of enabling people to pay with cash as opposed to credit cards for important purchases, while also teaching Canadians to plan ahead for non-recurring payments and emergencies, breaking the paycheque to paycheque cycle.
“Many people that are in our market are stressed out,” says Jen Leger, co-founder and CEO of Quber. “We want them to understand that they can get out of it. They can start slow and habits will change.”
Users choose a jar and select a ‘Savings Rule’ where their money is removed from the account and moved to a ‘Vault’ for safekeeping. The hold is based on certain restraints, and Quber Vault has already saved its users $1 million dollars to date.
For altruWisdom, it’s about ‘making the right money moves’ when the unexpected happens in life. There’s another intention, too — as co-founder Alisha Mawji explains, “Over time as you use [altruWisdom], you also become more financially resilient, so you’re in a stronger position to handle something coming next time.” The company offers two plans: a basic plan with access to tools, help articles, and general guidance, and a more in-depth plan with a personal trainer for finances that is there to keep users accountable.
“Every Canadian doesn’t have equal access, with [access] being conditional on assets, so the more assets someone has, the better advice [they] are given,” says co-founder Zakir Kanji.
A benefit to smooth over the money crunch
“You can’t be smarter with zero dollars, and a lot of people aren’t recklessly spending — there is just no money left,” says Kristen McGill, COO at ZayZoon, which aims to end predatory lending. ZayZoon partners with payroll providers to allow employees a way to access their wages as they earn them, ahead of their actual payroll, in the form of an employee benefit.
ZayZoon provides employees access to liquidity in between paycheques without putting them in debt, and without charging them extreme fees, says ZayZoon’s founder and CEO Tate Hackert. “From the moment they learn of us, to [the moment] when they can have money in their bank account — it’s less than two minutes,” he adds.
ZayZoon best serves those with variant pay: people working in the gig economy or contract workers. Truck drivers are big users of the product, McGill says.
Currently ZayZoon only operates in the United States, but hope that, following this accelerator, their service will extend to Canada as well.
“A lot can be avoided by documenting your financial goals and evaluating if you’re on track to meeting those goals,” says Joseph Pullano, investment advisor with Industrial Alliance Securities Inc. “And the more resources available to Canadians, the better off people will be financially.”