GreenSky Credit experiences explosive growth

While other financial technology companies, like Lending Club and OnDeck, had the idea of burning the traditional banking industry to the ground, GreenSky Credit decided to embrace the old regime and allow it to function with less friction. GreenSky Credit now appears to be the model that is taking hold across the financial tech industry. With OnDeck and Lending Club both experiencing stock price declines of more than 85 percent, it seems that the GreenSky Credit model of pairing existing lenders with merchants who are looking to make additional sales may be the definitive way forward for the fintech industry.

GreenSky Credit founder David Zalik is one of the most reclusive CEOs of a major corporation. The former child prodigy scored so high on the SAT test that he was invited to begin attending classes at Auburn University when he was just 12 years old, completely skipping high school in the process. But Zalik quickly grew bored with academia. A couple years into his studies, he dropped out to form computer assembly company MicroTech. The company proved to be a success, and Zalik sold it for around $5 million a in 1996.

By 2006, at the age of 32, Zalik had made some good investments in commercial real estate and was ready to try founding another company. He had gotten the idea for GreenSky Credit while working on another one of his firms, Outweb, an e-consultancy company. He knew that many businesses in the home-remodeling space struggled to close point-of-sale purchases with customers who had often badly underestimated the true cost of home renovation projects.

GreenSky was able to step in with promotional financing terms that were too good for most customers to turn down. At the same time, Zalik was able to sell GreenSky Credit loans to lenders as a way to bring in far more business from the most sought-after loan customers: prime borrowers. Because the average FICO score of a GreenSky borrower is 760, lenders can rest assured that they will not have to deal with many delinquencies or defaults.

The pairing of traditional lenders with over 17,000 merchants has proven to be a winning formula.

 

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David Giertz Recommends Financial Advisers Include Social Security

Too many financial advisers try to ignore the role Social Security plays in retirement. That’s what David Giertz, President of Nationwide Financial’s sales and distribution division, told Veronica Dagher, a Wall Street Journal Wealth Advisor columnist. For As Ms. Dagher said, it seems like a “no-brainer.” After all, Social Security could be up to 40% of a client’s retirement income. That’s clearly important.

The Nationwide Retirement Institute did a survey of consumers of financial advice services who are retired or within ten years of retirement. Most of the people surveyed said their advisers did not give them advice on how to maximize their Social Security benefits.

However, it’s vital to financial advisors to discuss the topic. That’s because four out of five people in the survey said they would change advisers of they did not discuss Social Security with them. Giertz admits Social Security is a complex topic. The Social Security Handbook has 2700 rules. Too many financial advisers don’t under all those rules, so they don’t have confidence around them, and so they prefer to avoid discussing them with clients.

David Giertz agrees Social Security should be an integral part of their retirement income planning process. One possible mistake retirees make is applying for benefits too early. They could lose up to $300,000 over 25 years. That’s $1,000 a month, or $12,000 a year. Therefore, it’s certainly important for clients to optimize their Social Security benefit to receive the most income possible while they’re retired.

Giertz is President of Distribution at Nationwide Financial. He has over 30 years of experience in the financial advice business. Since he took over, he has increased their sales from $11 billion to $17.8 billion.

He oversees the distribution of the company’s financial investment products, including annuities, life insurance, retirement plans, mutual funds and specialty products. They are sold to other businesses in the financial services market, including independent registered investment advisers and brokers and dealers.

Giertz graduated from Millikin University with a Bachelor of Science degree. Then he earned his Executive Master of Business Administration at the University of Miami. He started out as a Financial Services Adviser for Citigroup.