Dedicated investment advice for the not-so-wealthy, and gender-specific financial planning.
That's how two start-ups that presented at the FinovateFall conference last week in New York have positioned products that nudge the personal financial management sector in new directions.
By presenting their companies this way, Personal Capital Corp. and LearnVest Inc. are narrowing their focus in an area where products have been all about offering a broad, dashboard view of finances to as many people as possible.
"Mass market PFM does not work," says Jacob Jegher, a senior analyst with Celent.
Personal Capital focuses on the mass affluent, and LearnVest on women. Both offer free account aggregation and tools that help analyze everything from budgets to portfolios. But they also offer advice to their niches, for a fee.
By making their target markets so specific, and offering live advice, they perform an about-face on services like Intuit Inc.'s Mint.com, which provides more generalized account aggregation and tracking tools for its 5 million customers.
"Mint's users have dug in and found a couple of things -- while it is very simple at the surface, there is not a lot of support as you look to go deeper," says Emmett Higdon, founder and principal of Prizm Strategy, of Charlotte, N.C.
There is some small irony about Personal Capital drilling down deeply into the complexities of investments and investment guidance. After all, its founder and chief executive Bill Harris is also the former chief executive of Intuit and Paypal Inc.
Mint.com, the famous spin off from Intuit, is virtually synonymous with PFM. Its founder, Aaron Patzer's, explicit aim was to give consumers a free and simple alternative to the complexities of Quicken, experts say. (Mint.com was not able to respond immediately to a request for comment.)
Personal Capital is actually a registered investment advisory with a PFM spin. Its audience is consumers with a minimum of $100,000 in investible assets. In addition to being custodian for their funds, Personal Capital gives its customers a dashboard with all the basic things that other PFM tools do, such as a view of bank account balances and bills due. But since the focus is on investing, consumers see their daily portfolio positions and a real time analysis of net worth, among other things.
"We will get business from the disgruntled full-service brokerage clients who are not getting the personalized advice or attention they need, and on the other side of the spectrum, the online brokerage clients," says Rob Foregger, co-founder and chief strategy officer of Personal Capital.
Such consumers, typically in the middle class, can easily fall between the cracks, analysts say. They find it difficult to get advice from their banks, as they often don't have enough money to get the ear of financial advisors, and they have more sophisticated needs than Mint.com can offer them, Mark Schwanhausser, a senior analyst for Javelin Strategy & Research, says.
That is also the raison d'etre for LearnVest, which launched about two years ago but started its PFM and advice services eight weeks ago.
"Financial planning should not be a luxury, and the truth is that over the last two-and-half years, I have seen over and over again [beta] users saying, 'I have a question, I need more help,'" Alexa von Tobel, founder and CEO of LearnVest says.
LearnVest has attracted about $25 million in series A and series B funding from venture capital firm Accel Partners.