Nvest, a University of Toronto company, is gaining traction as a financial technology (or fintech) start-up to watch. Nvest is part of the third UTEST cohort, which is an early-stage technology incubator program co-directed by MaRS Innovation and U of T (read more about the UTEST program in our portfolio section).
In the last month, Nvest has been profiled in both TechVibes and Investment Executive as a company to watch both as a social network for stock picking and as a tool to bringing accountability to investment recommendations.
Jacob Serebrin writes for TechVibes:
Fredrick Zhou says there’s something wrong with the way people recommend stocks online.
“People don’t take responsibility for their actions, their words and their recommendations,” Zhou says.
He’s the co-founder and CEO of Nvest, a new social network for stock pickers that he says will bring accountability and transparency to a broken system.
Right now, he says online stock picks are a mess – some people don’t give specific recommendations, while others will “tell you when to buy but not when to sell.” Worst of all, Zhou says there’s no way to track how well someone’s recommendations perform.
It’s a problem he sees both among the amateurs using sites like StockTwits, a Twitter-like social network focused on investing, and among professionals. He says that means investors who are looking for recommendations often end up judging who to take advice from based on popularity not results.
Danny Bradbury writes for Investment Executive:
Another company, Nvest Inc., provides a new social media network for stock-pickers that’s going squarely after institutional stock-pickers, challenging them to document their investment track record electronically and prove their worth to potential clients.
“If you go to a financial advisor at a bank and ask what the alpha or beta of a mutual fund is, they don’t even know what you’re talking about,” says Fredrick Zhou, Nvest’s co-founder and CEO, about commodity investment advisors at the banks. “These people have no idea what they’re recommending.”
Nvest will help investors evaluate the performance of higher-end brokers and advisors that participate, Zhou says: “At a higher level, people who are managing and recommending stocks, you will know exactly how well they’ve performed in the past.”
Nvest is operated in conjunction with the University of Toronto’s science department, which helps to analyze and find value in investment data. Says Zhou: “We are trying to be the LinkedIn for stock recommendations. We care about credibility, transparency, completeness and reputation. We welcome all those who are able to beat the market consistently, and give them the reputation they deserve.”
The UTEST program will begin accepting applications for its fourth cohort on April 1, 2015.