While personal financial management sites have mostly targeted consumers, HelloWallet has chosen to target corporations directly to offer the service as part of employee benefits packages.
It's a strategy that's attracted 300,000 subscriptions in less than a year, and has also drawn new funding that the PFM firm will use to expand its operations. The startup just received $12 million in a funding round led by Morningstar and TD Fund. Morningstar's $6.7 million investment will complement a partnership, as the mutual fund rating firm will co-market HelloWallet to employers and 401(k) providers. TD Fund's $4 million will go toward client acquisition.
HelloWallet analyzes a user's financial activity measured against that person's mix of financial relationships and goals, such as reduction of debt or increasing savings. It uses an internally developed business intelligence layer and a proprietary data aggregation engine to analyze the behavior and suggest how the customer can reach his or her financial goals. Users also can "like" or "dislike" a certain expense, which goes into their personal profile and can be offered up later as a reminder.
"With that, we can give personalized guidance to people about how they can improve the way in which they are spending money," says Matt Fellowes, founder and CEO of HelloWallet, which has targeted Fortune 500 firms but plans to expand its services to a broader range of companies.
The platform also integrates with an employer's HR system, providing a link between spending and benefits. "If we see that you are going to a gym and are paying the gym directly, if your employer reimburses gym membership we can tell you that service is available," Fellowes says.
The PFM firm offers reports to employers on their employees' progress toward financial health goals, which is how HelloWallet's success is measured. The report that the employers see is an aggregate of all employees' "financial wellness"; the employer doesn't get to see individual employee spending habits by name. The employer or group sponsor pays for the service, which is where HelloWallet makes its money -- it doesn't accept advertisements on the site itself. "Where we live and die as a company is not in how well we are aggregating our accounts and giving people budgeting parameters, but in how well we are changing behavior," Fellowes says.
The expansion of the PFM model into corporate benefit plans provides added competition to banks, since it provides an outflanking maneuver and is a relatively rare use of PFM, though HelloWallet is not in a market entirely by itself.
Bryan Clagett, chief marketing officer of Geezeo, which offers PFM on a white label basis in partnership with financial institutions, says that credit unions offer similar services to HelloWallet when they make PFM part of the package they offer to members.
Clagett says Geezeo offers PFM to credit union members, many of whom are employees of the company affiliated with the credit union.
"So this is new in the sense that there's a PFM provider that says it's going to work directly with employers, but it's not new in the sense that that credit unions as a whole are offering PFM through employers."
A spokesperson for Yodlee, the market's largest provider of PFM technology, says one of its clients, Wealth Habit, offers a financial wellness solution for employees of its clients. The Wealth Habit tool monitors purchases and provides members with updated feedback and reminders about spending and goals. The product also communicates through web, mobile and SMS with the goal of increasing awareness of a user's financial condition, which in turn can aid decision making.