Fintech startup Frec has emerged from stealth mode, announcing $26.4 million in combined seed and Series A funding. The funding round was led by Greylock and included participation from Social Leverage and other investors. Frec’s mission is to simplify sophisticated investment strategies that were traditionally only accessible through wealth managers. They aim to make these strategies available to a broader range of investors.
Frec’s core product, Frec Direct Indexing, empowers customers to build personalized portfolios that mirror S&P indices like the S&P 500 and S&P Infotech. This direct-to-consumer platform offers the advantages of index investing while adding tax savings and customization options. Frec Direct Indexing can potentially increase annual returns by 2.11% compared to regular ETFs or mutual funds. This is done by daily tax loss harvesting, potentially saving investors up to 45% in taxes by offsetting capital losses.
Frec’s platform distinguishes itself by giving users greater control and customization over their passive investments. Unlike many robo-advisors, Frec enables investors to select and tailor the indices they wish to track. Additionally, the platform charges a competitive flat fee of 0.10% for direct indexing, a fraction of the fees often associated with wealth advisors.
In addition to Frec Direct Indexing, the company has introduced complementary products. Frec Treasury allows investors to earn up to 5.02% on cash through automated investing in money market funds. Additionally, Frec offers a portfolio line of credit with low-interest rates, enabling customers to borrow against their stock holdings.
Frec takes customer security and protection seriously. It is a Securities Investor Protection Corporation member, offering insurance coverage of up to $500,000 per account. Additionally, Frec, as a fiduciary, must prioritize its customers’ best interests and ensure strong data security through regular platform audits.
With its innovative approach to democratizing advanced financial strategies, Frec aims to serve financially savvy investors seeking more control, customization, and cost-effective portfolio options. Frec’s entry into the financial technology landscape appears well-timed and poised for success as the demand for such solutions grows.
