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New Website for Gen X and Gen Y Investors Offers the Wisdom of Crowds

A new investing/social networking website for Generation X (people who are roughly 30-40 years old) and Generation Y (19-to-30-year-olds) is going live today called Cake Financial. "The word 'cake' is slang for money and it also means 'easy,'" explains founder and CEO Steven Carpenter. The site will screen-scrape a customer's investment information from any and all of his existing brokerage accounts, provide an aggregated view of historical transactions

A new investing/social networking website for Generation X (people who are roughly 30-40 years old) and Generation Y (19-to-30-year-olds) is going live today called Cake Financial. "The word 'cake' is slang for money and it also means 'easy,'" explains founder and CEO Steven Carpenter. The site will screen-scrape a customer's investment information from any and all of his existing brokerage accounts, provide an aggregated view of historical transactions and current holdings, and let him compare his portfolio's performance against those of friends, family and others in the Cake network.This targeted demographic holds about $5 trillion in assets, Carpenter says, and they like social networking. "Gen X and Gen Y are validators - they like to do their own research," Carpenter says. "Friends and family are their most trusted sources of investment information. They prefer to use communication and collaboration tools like Facebook." In addition to viewing other people's holdings and performance (members can reveal as much or as little about themselves as they wish), members will be able to read notes others have written about particular stocks and mutual funds. Cake will rank investors by performance levels, such as platinum, gold, silver, and list the holdings of these high performers.

This new site does not represent any threat to brokerage firms' websites, Carpenter says. "We're not in the asset gathering game, we're in the information gathering business," he says. There's no intention to move money from existing accounts. Rather, he says, the Cake site should end up benefiting brokerages because it will encourage users to trade more and thus generate more revenue for their brokerage firms.

To market the new site, Cake Financial has posted several videos on YouTube. Two feature talking cupcakes seeking financial advice. In a third (my favorite) Carpenter goes out into the streets of San Francisco with a jar of jelly beans and asks people how many are in the jar. (The average answer turns out to be better than 95% of the individual answers, proving the theory of the wisdom of crowds.) The firm also plans to plug into existing networks, such as possibly Facebook, and investment clubs.

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