This Cincinnati Startup Wants to Simplify Complex Financial Transactions

How Luma Financial Technologies plans to bring these investments to a wider audience

For most people, the world of stocks, bonds, investments and annuities can seem like an impenetrable maze of math, terminology and calculations. That’s why many people work with financial advisors who they trust to keep their best interests in mind. But, believe it or not, some aspects of the financial world are challenging even for the professionals. Structured products and annuities are an emerging but complicated sector of the market, one to which the finance pros at Cincinnati’s Luma Financial Technologies are working to expand access.

“Luma is an online application that provides a number of resources to financial professionals to help support the distribution of these investments,” said Chief Product Officer Donald Pogan. “Some of our core features include learning and education, product and marketplace help and an investment tracking center we call our lifecycle manager. Really, what we provide is a platform for financial professionals to access and make transactions. With Luma, our value proposition was to provide more efficiency and transparency into the structured products and annuities marketplace. We’ve created a truly customer-focused, customer-facing application that really benefits them. It’s not meant to promote a certain product and provider. We want to give them the tools they need to succeed.”

Luma deals with a complicated system and a challenging field, but breaking down barriers is part of the company’s mission. Structured products and annuities provide little transparency compared to their stock and bond counterparts. Combine that with their relatively young age, the general complexities of the field and the dollar figures involved, and you have a market that can be difficult to break into. But by making the process easier for financial advisors who work with people beyond the typical wealthy demographics, Luma hopes it can bring this type of investment to a wider audience.

“If you go back 20 years or so, when structured products became somewhat mainstream, you would have maybe 15 to 20 total structured products issued in a year. That number has steadily grown over the past 15 years, but still it was viewed up until recent years as an institutional or high-net worth investment vehicle. What we felt we could do with Luma is make the product more accessible to a broader audience and expand our target market group much wider than the top 1%, if you will. To do that, we have to make an environment that’s easier to create the products, make transactions and track their performance. We have seen a very large increase in the total number of deals through our platform since launch and a significant increase in the total number of deals created. We’re really starting to see the benefits of the platform start to ripple down through our clients with more adoption and engagement.”

Luma is a spinoff of Cincinnati’s Navian Capital, and has only been its own entity since 2018. But the startup has already attracted investment from the likes of Bank of America and Morgan Stanley, and is rapidly growing and garnering partnerships. Luma is just one of many exciting financial technology startups that are flocking to Cincinnati. Chief Technology Officer Adam Hutcheson said the influx of talent and exciting businesses make Cincinnati the place to be.

“There’s a ton of opportunity in the Cincinnati area, especially in FinTech, retail tech and health care tech going on today,” he said. “For example, we’ve hired about 45 people into the engineering department in the last 18 months, the majority of them being right here in Cincy. Look at the economies of the very large companies that are here in the area. We’ve had very little concern with attracting and finding talent with the skill sets that are needed to grow a company like Luma. From a people perspective, from a community perspective, I think we’re well beyond the idea of having to be on the East or West Coast in order to build a great software company. In Cincinnati, we have the schools, we have the people, we’ve got the entrepreneurs that are starting companies.”

From their Cincinnati home Luma’s trajectory looks impressive. While they add new features and improve their core product, the company already has an eye on future expansion. In an increasingly connected world, Pogan said Luma’s services could be an asset far beyond Ohio.

“Given the size of the overall US economy, you would maybe assume that we’re the largest financial product consumers, but that’s actually not the case. There are a number of markets around the world that are significantly larger than the United States. One of those markets is Latin America, and we’re actively expanding into that region. Obviously, we’ll still have our headquarters located in Cincinnati, but we’re looking at the resources and functionality in our system that will help us to expand coverage for products in regions that already consume this this product. We’re really excited about that. We started to add some staff to support that segment, and we’ll continue to do so over the coming months.”