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Launching: HelloWallet is First New PFM of 2010

By Jim Bruene on March 8, 2010 3:15 PM | Comments (4)

image During 2008, we tracked more than a dozen new PFM launches. But it's been quiet since then. The last major launch was Thrive (now part of Lending Tree) at Finovate 2008. However, with Mint exiting with a $100+ million gain late last year, the space is bound to heat up again. 

It's not like there isn't room for quite a few entrants. The United States supports 15,000 banks and credit unions; there's no reason why there won't be dozens of successful PFMs.

imageThe latest entrant, HelloWallet officially launched today (press release). While its features are similar to others, it has one claim to fame that's tough to beat, an endorsement from a former U.S. president. According to a Sep. 2009 BusinessWeek article, Bill Clinton, singled out HelloWallet in his address to the $20,000-per person Global Initiative event in September.

The for-profit site founded by former Brookings Institute fellow, Matt Fellowes (Brookings archive; inset with Bill Clinton), has attracted the attention of both politicians and foundations with its mission to:

...democratize access to honest, high-quality financial guidance for everyone.

HelloWallet appears to be an advertising-free business model with moderate $5/mo (or $48 annually) fees covering its costs. It's also being distributed free-of-charge through institutional partners such as The Rockefeller Foundation.

The startup has pledged to give away one subscription to a lower-income family for every five paid ones. That's a smart strategy, especially when what is being given has essentially zero marginal cost to deliver. HelloWallet's features include:

  • full account aggregation so you can track all your financial accounts from one dashboard
  • financial tools for investing, saving, reducing bank fees, and so on
  • banking price comparisons
  • budgeting tools
  • bank-fee and credit-card-APR monitoring services
  • goal-based savings

My take: I kicked the tires a bit, successfully setting up automated access to my checking account, and manually adding a few more assets. But the site was a little buggy today, hitting me with error messages and delivering dead links, so I'll hold off judgement until they get things stabilized. But it looks like a well-funded and promising effort so far.

HelloWallet homepage on launch day (8 Mar. 2010)

image

Note: For more information on the PFM space, see our Online Banking Report on Personal Finance Features.

Comments (4)

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4 Comments

It's commendable to work towards improving financial literacy, so kudos to them for having that goal in mind from the start.

I'm all for more PFM competition (at least now that I'm not in that industry). But, you're statement is surprising: "there's no reason why there won't be dozens of successful PFMs" Really? Do you think so? I can think of plenty of reasons, but mainly because PFMs don't make nearly as much money as banks do. So, you see 3 main options today: charge, affiliate/ads, white-label. Only a couple can probably get the scale for affiliate/ads, charging is a deal-killer at this point with plenty of great free options, and white label is hard to scale with difficult integration problems to solve. So, no I don't think there will be dozens.

I'd like to try it out though, did they give you a promo code to share? Did you pay for access?

@Ryan

Good point...I meant to expand on why there could be "dozens". You are probably right that only a few can get enough usage to survive on ads. But I also think there will be a number who make it on fee income. A small PFM biz charging $5/mo, might need 10,000 users to make a nice income ($600k annual revenues).

But the main reason I said dozens is that the 15,000 financial institutions in the country are going to be outsourcing PFM capabilities from companies such as HelloWallet. That will keep quite a number viable for the next decade or two.

Who's Bill Clinton?

I have been in the banking industry for about 4 years now. We were ready to start our due diligence process and implement a PFM about 2 years ago then the economy went down the drain. In our situation now currently spending a bunch of money on a PFM seems out of the budget due to the costs of the current PFM system in the market.

If one of the PFM companies made their product more affordable for smaller FI I think it would take off.

Another thing I have noticed is that most of the solutions are Bolt-on systems and not integrated within the online banking solution. Also we don’t want to promote our
members from leaving our online banking and going to a 3rd party site to manage
their finances.

So how many of these stand alone PFMs can last without working with a bank
Or credit union to integrate their system within an online banking platform? When Mint.com and intuit seems to rule that arena for stand alone PFMs.

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