By: Maria Williams
There’s no denying the complexities of investments, even for the experienced ones who have dedicated their lives to mastering this field. These professionals must constantly stay attuned to market fluctuations and economic traits. This dynamic can be daunting for the average Joe, for whom trust becomes a crucial factor in entering the market. Without confidence in those guiding their investment journey, their success hinges precariously on uncertain ground.
“The investment industry is plagued by a pervasive lack of trust,” laments serial entrepreneur and founder of SABBI by Core Capital, Martin Bedoya. Even according to a report, advisors ranked fourth out of six types of professionals when investors were asked which they consider to be more trustworthy. Nearly a third of investors ranked advisors last or second to last for trustworthiness; 46% placed advisors in the third or fourth spot, and barely 23% put them at the top of their list.
Often, those investment advisors are more interested in profiting from the products they sell than genuinely assisting their clients. This misalignment of interests fosters an environment where investors are wary, questioning whether recommendations are actually helping them achieve their goals or merely lining the advisor’s pockets. Consequently, many potential investors are deterred, opting instead to let their money languish in low-yield savings accounts, missing out on the opportunity for significantly higher returns.
SABBI’s founder recognizes the paramount importance of trust and community, especially in this investment space. Unlike other players who focus primarily on product offerings, SABBI understands that the most significant challenge is not in the investments themselves but in building accountability. This insight is particularly relevant in the context of lower and middle-income investors, for whom personalized advisory services are often economically unfeasible.
The wealth management industry traditionally caters to high-net-worth and ultra-high-net-worth individuals because banks and financial advisors can afford to invest in building reliance with these clients. The brand recognition and financial resources of large institutions enable them to create and maintain these relationships. However, when dealing with smaller investment amounts, the costs of building this trust often outweigh the potential returns, leaving lower-income investors underserved and vulnerable to subpar advice and products.
SABBI’s approach addresses this disparity by leveraging the existing trust within communities. Instead of attempting the costly and arduous task of building trust from scratch, the company taps into pre-existing social bonds and networks. This strategy is both cost-effective and powerful, as it builds on the assurance that community members already have in each other.
This community-based model designed by the company disrupts this status quo. By focusing on building a network of trusted community advisors, SABBI democratizes access to investment advice. “We’ve seen firsthand how lack of transparency and inaccessible advisory services push investors towards safer but less rewarding options,” the founder notes. “Our commitment is to democratize access to reliable financial guidance without compromising on trust or affordability.” This approach not only makes financial advisory services more accessible but also aligns the interests of advisors and investors more closely. When advisors are part of the same community as their clients, they are more likely to prioritize the community’s overall well-being over individual profit.
In Latin America, this problem is particularly acute. The lack of accessible, ethical advisory services means that smaller investors often feel marginalized or overlooked by traditional financial institutions. This situation perpetuates a cycle where established banks and financial giants continue to dominate, offering solutions that may not be optimal but are backed by a longstanding reputation for reliability.
Currently catering to Peru, SABBI will be expanding into Latin America as well, creating a community-based model that holds true authentic promise to its clients. The LATAM market suffers from a significant credibility gap in the financial sector. By establishing a presence in this region, SABBI can leverage local community networks to build confidence and offer reliable, personalized investment advice. This expansion is not just to enter a new market; the company aims to apply a proven model to a place where the need for trustworthy financial guidance is acute.
“For many investors, the money they save and invest is more than just financial growth; it represents their dreams and hard work. It’s the means to secure a home, fund their children’s education, or ensure a comfortable retirement. The emotional weight of these goals makes the need for honest financial guidance even more critical,” says Martin. When investors feel confident that their advisors are acting in their best interests, they are more likely to invest wisely. “By placing trust at the forefront of our mission, we truly aim to shape the landscape of wealth management.”
Published By: Aize Perez
