When advising clients on how to build their net worth, reducing the cost of their debt is an essential part of the equation. A Morningstar survey showed 83% of clients want liability planning, but only 5% of advisors offer it. Move your advisory firm up to the next level by creating an optimized debt management plan and identifying areas for significant savings for your clients.
On this Elementality, Abby welcomes Rohit Argawal Co-Founder of Sora Finance, a firm that helps advisors add liability planning to their service offerings. Sora Finance’s user-friendly platform provides insights, generates detailed reports, presents recommendations, and offers seamless loan management—all with a focus on helping clients grow their net worth.
Podcast Transcript
Rohit Argawal:
The dream was, can we build an autonomous engine that if an advisor has a client on Sora eventually can we be just running in the background and eventually always have you in the same way that a portfolio rebalances based on rules on the, can we do the same thing on your debt side? I guarantee you the best deal whenever you’re taking out a new loan and it’s very seamless, then constantly monitor those loans to try to find savings.
Jordan Haines:
Welcome to Elementality. Each episode, we will explore the challenges and the opportunities faced by financial advisors and how advisors can use elements to grow their business and serve their clients better. We hope you enjoy this episode.
Abby Morton:
Welcome to Elementality everyone. I’m your host today, Abby Morton with Rohit Agrawal from Sora Finance. How are you today, Rohit?
Rohit Argawal:
Oh, I’m great, Abby. Thanks for having me. Excited to chat with you.
Abby Morton:
Yeah. We’re so excited to bring Sora Finance to our listeners today. I think our CEO actually got introduced to you guys. I don’t actually know that story, but then I got introduced to you guys at XYPN Live, I was about to say XY planning network. XYPN live this last year and have learned a little bit more about what you guys are doing, and I think it’s really interesting and something that I think all our financial advisors need to know about. So for those who haven’t heard of Sora Finance, can you talk to me, what is Sora Finance? What are you guys trying to do today?
Rohit Argawal:
Yeah, for sure. Well, well, thanks for having me. And I think at the high level, what we do is we try to optimize clients’ liabilities. So we do all things debt. If you think about it, I guess our catchphrase is liability planning as a service. And so what that means is, we think a lot of advisors support their clients on a multitude of things. Whether it’s investing, tax planning, overall coaching and planning. We wanna own the… And do everything that we can on the liability side. So we think at the end when you have assets minus liability, that equals net worth, if you actively manage the liability side, your clients are gonna be in a much better position down the road. How that manifests itself is a lot, and we’ll jump into it, is a lot of, do you have the right data? Do you have the right kind of lender networks? Do you have the right analytics, the right recommendations? From an elements perspective, it’s almost a triple click on that debt element is where we live at Sora.
Abby Morton:
I love that. I love that connection there to elements and Sora. It’s really just diving in deeper on that debt element and understanding how it all works together. So tell me a little bit about how, is there a platform? Is there a website? Or is it an app that an advisor is using? Is just the advisor using it, or the end client? Tell me like how do you connect to that right data that you’re talking about?
Rohit Argawal:
Yeah, for sure. So we have about, it’s about 400 RIAs on the software. And right now, we are a standalone software, so most of them go to SoraFinance.com and log in. We do have an API, so we’re working a lot to integrate in with other planning softwares, whether it be at the CRM level or at the planning software level. We’re about to integrate with with Wealthbox, but right now, we are a a standalone software, Sorafinance.com. I’d say the way the advisors, when an advisor goes in, they first onboard their clients. So we have about, I’d say about 12000, 13,000 end clients on the software. And for each client, the way an advisor gets those clients on the software is they share with us PII. So we do need kind of first name, last name, social security, date of birth and phone number.
Rohit Argawal:
And with that, we then have a live link as our APIs go, we do a soft credit poll to pull in the outstanding balance and credit score of the individual, but then our APIs go directly to the lenders themselves. So we will go with that info to say you have a mortgage with Wells Fargo, our client has a mortgage with Wells Fargo. We’ll go to Wells Fargo and pull kind of the granular level of data. So the interest rate, the term, the monthly payment, and the balance. And once that link is made, it’s a live link that’s updated on a daily basis. So now the advisor without the client having to lift a finger beyond we do use the PII, now has a live look into all of their existing liabilities.
Abby Morton:
So talk to me more specifically about that. ‘Cause I know at least from an elements perspective. We have to integrate with Plaid And have the end client connect with their username and password to, for example, Wells Fargo to pull over that mortgage or even their bank accounts there. So talk to me more specifically how you’re able to like reach out to Wells Fargo without the client lifting a finger.
Rohit Argawal:
Yeah, so the client owns the data, interestingly, as of, as a couple years ago. So it’s the client’s data. If they want to see their data and have it shared with someone, it’s up to them. And so it’s kind of this new permissionless granting where they’re granting us permission either the advisor by sharing their PII and saying yes. So they said their first name, last name, date of birth, social and phone number. And then we use a combination of third party APIs on our own. So it’s literally going lender by lender and saying, “Hey, we wanna integrate with you and we wanna pull in this information.” Now I think there is a second layer, which Sora does is a lot of times the lender might not be in the network, so you can’t pull it in.
Rohit Argawal:
So you just have the balance that you pulled from the soft credit report and/or you might only be able to pull the monthly payment that they’re reporting might have insurance and taxes in it. And we care about, so there is this huge layer that Sora has is when we pull in the data, a whole layer of data enrichment. And when you’re on Sora as an advisor, you’ll kinda see that data falls into three buckets of competence. High, means we pulled it directly from the lender itself, and we feel 100% competent in each of these figures. Medium, that means we had to run some calculations. So we either pulled out property taxes, we pulled out insurance, or we thought, our algorithms thought that you have HOA payments and mortgage payment. And so we pulled it out and that’s when you’ll get a medium data confidence for the advisor to talk to the client, is this correct or do we need to change it?
Abby Morton:
Okay, but it’s like proposing like we think this is your just PNI, we think this your principal and interest. We think this is HOA, we think this is your insurance.
Rohit Argawal:
Exactly.
Abby Morton:
Okay. Interesting.
Rohit Argawal:
Exactly. And then HELOCs, if it’s floating, we make an assumption based on the date, say we always know the date you opened a loan. And so that’s a big data point into kind of where we’re rates on that day. Looking at the average to kind of triangulate into to what it is. And the reason we really care about that monthly payment and rate and term is we need that level of granular data to run our analytics and to optimize it to say, “Hey, does it ever make sense to refinance?” Less so now with rates continue to go up, but we think if rates come down in 2024, 2025, just looking at the end clients on our software, there’ll be lots of opportunities to refinance and save money. Two, we like to look at your true kind of cost of debt when we’re recommending kind of new loans as well. But yeah.
Abby Morton:
Okay. Very interesting. So you pull in all this data into a platform, and it sounds like the advisor is mostly using this platform to then form make educated decisions with the end client about their total debt. So you’re pulling in every line item of debt for that person.
Rohit Argawal:
That’s right. Then so I’d say for… So there is a client login as well. So I’d say about 25% of the end client’s login, the vast majority, it’s kind of an advisor focused portal. So the advisor would log in, they see all their clients in one place, and then they have certain alerts and call outs. So if we think there’s a alert you should be focused on this client here. And then I think the other thing though they get is a bunch of insights and recommendations. So for each client…
Abby Morton:
Now, give me some examples of what those recommendations are.
Rohit Argawal:
Yeah, for sure. So there’s twofold. If an advisor clicks on a client, they’ll have recommendations scrolling on the bottom based on what we’ve pulled in, they’ll see all of their existing liabilities. And then they’ll have recommendations scrolling on the bottom. And then they’ll also have a PDF downloadable report that they can kind of pre-populate into an email. Examples of recommendations kind of fall into five or six main buckets. The first one is, if we ever find an opportunity to save, we’ll say we recommend you refinance with Farmers or NBKC or United Wholesale Mortgage, and this is going across all consumer debts. So is there an opportunity to save to a big bucket around just things that are available to you? So, “hey, if you wanted to get a HELOC, this is the best rate you’re gonna get right now, and you could tap a HELOC of this amount.”
Rohit Argawal:
If you were buying a new car based on your profile and what we know about you, this is the best rate you’re gonna get from scanning our credit union members. Or based on your credit score, here’s kind of three things we think you should do to improve it that are tactical against your existing credit score. And so it’s a combo. Right now, the insights are a combination of a rules-based engine that Sora has built out. ChatGPT. We do have a bunch of prompts that feed into it, and then third, before it is often uploaded into the PDF, a human on our team reviews it.
Abby Morton:
Okay. Very interesting. Okay. So understanding the recommendations that it’s giving, like you said, here’s maybe interest rates, are you looking at like geographically and location wise? I’m just thinking there’s so many lenders and so many banks out there. I mean, how are you possibly capturing it all and filling like you are able to give the best advice? Because it’s so nuanced, I feel like where you live and all the opportunities out there.
Rohit Argawal:
Yeah, for sure. And I think that’s where what we’ve spent building out over the last two years is we kind have two pieces on the lender side because a lot of the recommendations are driven by, “Hey, what can we get for you on the lender side?” And transparently right now, advisors are using it a lot more on new loans. They request new loans on the software. So they have a client looking for a mortgage or a cash out refi or an auto loan or a student loan refi. They can also request kind of a a detailed debt pay down scenario for folks that might have high credit card debt. The way we do that is, we have some lenders in our, we have 50 plus lenders that are integrated in the store that we’ve just built out and gone out to lenders and say, “Hey, on a daily basis, can you send us, what are you offering for someone that has this credit score, this income, this debt to income ratio and lives here and this with their address?” And I think they, interesting thing there is the lender doesn’t know who the client is. It’s just an anonymous profile. So the client’s never spam. Nothing. It’s not like going to put in a lead form at LendingTree.
Abby Morton:
Yeah.
Rohit Argawal:
The second thing though is, we actually run a web crawler. So like a good example is we had a client who was looking to buy a vacation home in Colorado, and our web crawler surfaced elevations credit union. Which elevations credit union is not in our 50 plus lender network. But we recommended Elevation because based on our web crawler, which is essentially taking the profile, creating an anonymous person, and going out to a bunch of different websites to say, “Hey, what are you offering?” They came out to have the best rate. And so then we go after the fact say, “Hey elevation, do you want to integrate with Sora as a lender partner?”
Abby Morton:
Okay. And how, like is it easy to get of their lender partners out there to join kind of your, this network? Are they interested in doing that, or is there some pushback there?
Rohit Argawal:
Yeah, so I think there was definitely pushback initially as when we were early. I think now that we have volume coming through Sora and so I think we’ve had about $170 million and loan volume go through the software in the last nine months. It’s made it much easier to get lenders to say, “Here’s real examples of people requesting these loans.” Mainly advisors requesting for the client or the client requesting it. Do you want access to this for access to it? You need to, basically, we care about three things from a lender. What is the rate you’re offering? What is your certainty to close? And what is your your timeline to close?
Abby Morton:
Okay.
Rohit Argawal:
It’s been easier on the, we also offer commercial lending for business owner clients. So lot of advisors have used Sora as a way to get deeper into their business, their client’s business life. And so there, it’s just much more normal for commercial lenders, whether it’s SBA, commercial real estate or working line or inventory or working lines of capital are much quicker to integrate.
Abby Morton:
Yeah. Okay. So fascinating So this brings me to, I’m sure, a common question you get is like pricing. How is Sora… Sounds like you are providing a really great service to advisors. How are you making money? Are advisors paying you kind of a monthly fee to access? How does that all work?
Rohit Argawal:
Yeah, sure. So we do charge a monthly subscription for an advisor. It’s different kind of at an enterprise level versus an individual RIA. We charge $100 a month for access to software. And then on the backend, we make revenue through lending transactions. And so we are also a licensed mortgage broker. So we do compare wholesale lenders. So we have loan officers on our team if the best deal happens to be United Wholesale Mortgage or their save. And so then there we’d have an origination with other lenders. We have an agreement in place. And I think one interesting thing with Sora is our agreement is the same regardless of lender. And so we never have an incentive to show one lender over the other.
Abby Morton:
Yeah. That’s interesting.
Rohit Argawal:
Yeah. And then in transplant right now, we don’t make money on some loans because we just care about getting the best rate. And so like on that elevations credit union, if they become, we basically want to get the best deal. And then over time, we think we’ll have relationships with all the lenders.
Abby Morton:
I like that. So it sounds like from an advisor’s perspective, I’m paying you a small monthly fee. Not only am I getting a really good breakdown of their full debt profile, you’re also though helping me, okay, let’s refinance this, or I do wanna open up a HELOC, or I need to buy a new car. I wanna buy an auto loan. You’re helping me then, from an advisor’s perspective, almost take that to the next level. I feel like today as an advisor, I would just tell my client, yeah, you’re kind of on your own to figure it out, right? Like, you go shop the best rates, like maybe I have some relationships or some way to help them a little bit, but I feel like, am I understanding that correctly with Sora? Like I’m almost taking that to the next level where I’m able to like, come back with some concrete, here’s the interest rate. Like this is the research that I’ve been able to find to help move that relationship forward and even that change that they wanna make forward. Is that correct?
Rohit Argawal:
That’s spot on. I think what we’re trying to solve is that’s exactly it. Like we want the way, the same way advisors are kind of in it day to day on the plan, the financial plan or the investment side, the same way on the liability side. And I think what we, what advisors really like is for any, we always tee it up as kind of three options for them that they present to the client. Here’s the pros and cons of the three options that we surface based on this lending need you have. And then they kind of have the always on proactive software, if anything saying, letting the client know, Hey, if you can ever save money, I’ll let you know.
Abby Morton:
Yeah.
Rohit Argawal:
But yeah, that’s…
Abby Morton:
I like that.
Rohit Argawal:
Thanks.
Abby Morton:
I like that. So taking a step back outside of the software, I know you’re a fairly new startup, I’d love to just talk about number one, like when did you guys start? But then number two, I’d love to know kind of like the drive or the reason why debt, the reason why finance kind of where did you come from day one?
Rohit Argawal:
Yeah, for sure. I think, yeah, jumping that last comment on the previous one, the other thing we’re trying to solve is like 83% of clients want liability management and planning. And right now only about 5% of advisors do it. So we think there’s a huge opportunity. We start…
Abby Morton:
Tell me more about that. Like where do you find that, that statistic from?
Rohit Argawal:
Yeah. So just a survey of, of Morningstar ran a survey of clients and it’s like, on different things, what do you want? And so we use that 83% of clients want liability optimization or debt, help with their debt. And I think a lot of advisors don’t do it because they’re time constraint. It is time consuming. It’s opaque complex, to your point, hard to get all look at all these different lenders. And then third is, with some advisors, we also have a revenue. It hasn’t been accretive to their practice. And so depending on the type of advisor. With some, we do have a revenue share on the backend on the lending side, so it becomes accretive. But I think a lot of advisors like to use it as a way to maybe engage new prospects on how they’re differentiated, but to better serve their existing clients. But yeah, Sora, we started in sorry, we’re hitting our two year anniversary here on the November 8th. We started November 8th, 2021.
Abby Morton:
Awesome. Love it.
Rohit Argawal:
It was mainly around… Personal experience. Like I’ve always been into personal finance, and so was my co-founder, and even then, like running a very complex spreadsheet, never didn’t know if I got the best rate on our first mortgage or got the best deal. And even the time consuming it was to do that to, I thought we were slow to refinance our student loans my wife and I when we were coming out of grad school. Whereas in, when I ran the math on how much money we left on the table by waiting about 14 months when we finally got around to it to right to refinance our student loans. It’s significant. Particularly now with kids, every dollar counts that could be going, but… And so that was the… And then we did a lot of work on, Hey, could you do this?
Rohit Argawal:
Could you, the dream was can we build an autonomous engine that if an advisor has a client on Sora? Eventually can we be just running in the background and eventually always have you in the same way that a portfolio rebalances based on rules on the, can we do the same thing on your debt side? I guarantee you the best deal whenever you’re taking out a new loan and it’s very seamless, then constantly monitor those loans to try to find savings. So that’s what we really got excited about. We originally started direct to consumer…
Abby Morton:
I was gonna say, why go the advisor route? Okay. So this is interesting.
Rohit Argawal:
Yeah. We started direct to consumer out of the gate. And I think what we learned on the consumer side, and I think that’s helped us because we built a consumer grade product. Thinking about this, we’re gonna be competing with Mint and all these personal finance apps it has to have a certain UI/UX, and and feel to it. Is it consumers think of debt at a point in time, I need to refi my auto loan, or I need a mortgage now I need a… And we were trying to pitch this idea of think about your debt holistically. Like sign on, let us do all the money…
Abby Morton:
I like that.
Rohit Argawal:
Exactly. And then we can…
Abby Morton:
Well, and I’m thinking they think of it very nuanced, right? They don’t think about all the debt together. Probably like you said, they think about, well, I just need to do this one thing that has to do with that.
Rohit Argawal:
Exactly. Then you go and spot on. Where it’s like, can you look at it? Like, here’s the trade offs on all… And then we honestly started trying as we learned that the other part is just the cost per acquisition from a direct to consumer perspective as well, just from our overall business model perspective. We tried kind of employers and advisors as a like employers using Sora as an employee benefit. And then we had a pilot with about 20 RAs to try it out. And I think we definitely saw the pull much higher on the RA side. And that’s where we decided as a business, and this is… Now, it’s been about 18 months where we’ve been 100% focused on advisors. There’s no other way to use Sora unless you’re a client of an advisor. And I think the pulled there and influenced our product, but we saw a lot of clear signs of demand. And I think it’s proven out in terms of our ability to get a lot of these RAs that don’t have a bank behind them. Our core customer isn’t a Merrill Lynch advisor who has Bank of America behind.
Abby Morton:
Yep.
Rohit Argawal:
It is kind of these RA that don’t have a lending arm. And that’s kind of how we ended up there. And now we’ve been really focused on advisors. We also like that we think RAs is growing as a kind of segment of the, particularly these RAs moving away from wirehouses. And just in general, I think what’s proven out is younger people or millennials still are hiring advisors at the same clip as the previous generations, even though everyone thought it would be fully self-driving I guess, or so we liked all those coming together to focus on advisors.
Abby Morton:
Okay. Were you guys familiar with the financial advisor market before? Did any of, either of you or your co-founder have a background in like financial advising?
Rohit Argawal:
No. To be transparent. So we’ve been going… It’s been steep learning curve, but now I think we’ve lived and breathed financial advisors. I think before too, running the pilot with 20 RAs was super helpful.
Abby Morton:
Right. Oh, I’m sure you’ve learned a lot. And No, I asked that question just purely ’cause it’s like, it seems like a very specific thing targeting the financial advisors and not necessarily going after like a Charles Schwab or Merrill Lynch or like the bigger banks. So I think it’s super fascinating, but I think you found, like you wanted them to think about debt holistically. You wanted them to think about the whole client picture and how can you help all across the board? So I feel like in hindsight, it makes perfect sense why you would target financial advisors and how they could really use this tool. I love how you even said like in an onboarding, right? And in a very initial conversation, you know? You could use Sora to really help you if the client has a decent amount of debt, really, like show the client, “Here’s all the things that I can do to help you with your debt,” ’cause like you said, it’s a big concern of people today. And unfortunately I feel like, we just are getting wind more and more that.
Rohit Argawal:
That’s true.
Abby Morton:
That’s great. That’s awesome. Well, it’s neat to hear too that I think oftentimes with startups, it sounds like the original idea and vision and what it is today years later is often very different. But it sounds like for you guys, yeah, you’ve made some tweaks here and there, but it sounds like yeah, at least the initial idea is kind of still what you have today. Would you believe that?
Rohit Argawal:
That’s true. I think we still firmly believe that like debt, to your point, how many people 17, $18 trillion in the household debt in the United States. I firmly believe it is almost impossible to get the best rate if you’re just going out there shopping for any new loan and then to refi when it exact moment. It makes sense. So yeah, the core idea stayed the same. The big shift is now we’re fully a wealth tech company. And just live and breathe and advisors and advisory firms and RAs.
Abby Morton:
So, cool. All right. Well any final thoughts for our listeners? I know you shared the website, but maybe share it one more time and what can they do if they wanna get signed up with you guys?
Rohit Argawal:
Yeah, we would love to work with with RAs out there. They’d go to Sorafinance.com and just click request demo on there, and then you’ll get a demo with someone on our team and get your account set up. And we offer seven day free trials right now as well.
Abby Morton:
Awesome. Well, very cool. Well, thank you so much. I really appreciate your time. Thank you for creating another piece of tech that advisors can use and really take their practice to the next level. So appreciate all your work.
Rohit Argawal:
Yep. Thank you. Thanks, Abby.
Abby Morton:
Next time on Elementality.
Jeff Morgan:
And if you think of this as like a marketing funnel, I’m sure everybody’s heard about that before, but like the top of the funnel is awareness. People can’t engage in your content. They can’t like your content, they can’t be, you can’t develop a relationship with anybody unless they’re aware that you exist, right? So what we’re talking about today is like, how do you build awareness of your content of your, of your channel or your email list or your podcast on a $0 budget. Like that’s really what we’re talking about here. Now, if you’ve got money to spend.
Abby Morton:
That’s a whole other episode.
Jeff Morgan:
That’s another episode. Like there’s lots of ways that you can like accelerate the process of building an audience if you’ve got a budget.
Abby Morton:
To find out more about Elements, go to getelements.com/demo. Elementality executive producers are Reese Harper and Carl Richards. Elementality is produced by Tadd Henderson and directed by Abby Morton. Have a good one…