How Important Is it to Diversify?


Steven Wallman Image Steven Wallman Founder and CEO, FOLIOfn, Inc.

FolioInvesting CEO Steven Wallman describes how his company aims to help retail investors diversify. By using the portfolio strategies offered, retail investors are better able to stay the course, he tells

Kate Stalter: Today’s guest is Steven Wallman, founder and CEO of FOLIOfn and FolioInvesting.

Steve, there are a number of intriguing angles that we can discuss today. I wanted to start out by pointing out that you are a former SEC commissioner, and I understand that one of your objectives in forming this company was to address what you saw as some unmet needs of individual investors?

Steven Wallman: That’s absolutely right. When I was investigating why individual investors seem to have trouble investing in a wise way, we discovered a number of things:

  • There was much less diversification than one would expect from those who were in the market.
  • There was no attention or almost no attention paid to taxes.
  • There was a misunderstanding as to fees and costs.
  • And there was a general tendency for people to go to one-size-fits-all investments without thinking about their own real risk levels, or how best to structure an investment for themselves.

So we started the company with the notion of creating a smarter, better way for people to invest, which would be through diversified portfolios that they can customize and tailor to meet their preferences and needs at very low cost.

We have a set of pricing plans that really allow for all the costs to be taken out, in terms of commissions that otherwise an investor would incur, and also to be able to look at after-tax returns as an important factor in thinking about how best to invest.