Transforming the Lives of Mexicans Through InvestmentsBy Sofía Hanna | Tue, 01/25/2022 - 11:16
Q: How has GBM+ transformed investments in Mexico?
A: GBM has been the largest broker in Mexico for the last 30 years but we had focused on larger capital bases. Five years ago, we worked to eliminate every single barrier to investment and allow everyone to become an investor. We first built a digital app for everyone to start investing. GBM+ offers every tool that investors would like to use. Before our app, potential investors had to have an in-person interview with an advisor and a minimum of MX$1 million (US$48,989) in capital.
Today, we are opening accounts with MX$100 (US$4.9) and the onboarding takes 10 minutes. It was a great transformation for the industry.
Q: What tools does GBM+ offer to its users?
A: GBM+ offers a Smart Cash account, a Wealth Management account, a Trading account and the Trading Global experience. Smart Cash is a daily liquidity account with a 5 percent interest rate that can be accessed immediately. It is similar to a bank account but banks pay 0%, while we pay the investor that 5 percent. This has been highly successful. We launched this product in November 2020 and it had significant success, with close to a million Smart Cash accounts to date.
The GBM+ app offers our three tools in the same place and allows users to invest in international stocks through Trading, which became increasingly popular as a result of the pandemic and the fintech revolution.
Two months ago, we launched Trading Global, which allows investors to buy fractional stocks. Today, our clients have access to over 10,000 instruments and this has really strengthened the growth of GBM.
We also built a digital advisor through Wealth Management, for those who want the help of an expert. This tool analyzes the investor’s profile, objectives, term and risk profile and builds a personalized portfolio. This tool is key to transforming Mexico. In the past, investors needed a large net worth to have an advisor. Now, they can start with a small amount with an advisor by their side. We are still innovating and will introduce new tools in the future.
Q: Aside from these three tools, what strategies does GBM+ implement to increase general knowledge surrounding investment?
A: Financial education is essential; everyone should have at least basic financial knowledge. To that end, we developed GBM Media and GBM Academy. These offer free basic courses, called masterclasses, and provide a series of materials on financial education, which are available to everyone.
Reaching out to students is important for us. We do at least one monthly event with universities to spread the message about the importance of investing. University is the best moment to start investing. We also work on competitions and new ways to make investment attractive to young students.
Q: How relevant is having investments in addition to work and savings?
A: This is crucial, especially in the times we are living today. It is next to impossible to reach one’s financial goals just by saving. Inflation is high in most parts of the world. In the past 10 years, Mexicans lost half of their purchasing power because of inflation. While low-risk assets such as Smart Cash provide a 5 percent return, longer-term assets, such as the stock exchange, are where real returns come from.
A person who starts saving at the age of 20 and retires at 60 has 480 months to invest. If they invest MX$1,000 per month at a yield of 0 percent, they will end up with MX$480,000 after 40 years. If they invest at the 15 percent that the S&P 500 has yielded the past 10 years, that MX$480,000 becomes MX$31.4 million, which is 65 times the money initially invested.
Q: What is a good GBM tool to start investing without much risk?
A: Opening an account and funding a Smart Cash account is the first step. A 5 percent yearly yield is significant compared with any other option in the US. This should be followed by a wealth management account to build a portfolio based on the investor’s needs.
Q: What are GBM+’s strategies to keep users’ financial and personal information safe?
A: We are very careful with that information. Even advisors have limited access to personal data, which is kept private and close to no one has access to it. We invest every day in security, both within our employees and systems. It will be a big investment in 2022 and in the coming years.
Q: How can Mexico become a country of investors?
A: At GBM, we are promoting an investment culture but we cannot do it alone. Financial education has to core in everyone’s lives, starting in high school and learning about basic finance.
Building better products is also crucial. In Mexico, there are 60 million loans but only 2 million investors. It has been important to build better investment solutions. Latin American banks are the most profitable in the world because they provide loans at very high yields and have not offered their clients investment products. It is important for us to continue building these products to democratize access and convert Mexico into a country of investors.
Q: What plans does GBM+ have in Mexico for the medium term?
A: Mexico is our focus, as it has over 120 million people but less than 2 million investors. We are analyzing other countries and opportunities but our priority for 2022 will be Mexico.
We will continue to listen closely to our customers and investors. Feedback allows us to understand what is important for investors in the future. We are constantly building products, strengthening those we already have and offering new functionalities. GBM+ is also aiming to bring investments closer to everyone with a very simple but powerful app.
GBM has been Mexico’s largest broker for the past 30 years, working mainly with larger capital bases. The firm created the GMB+ platform five years ago to work with small investors.