Markets & Finance

In Financial Advice, Alexa von Tobel May Be the Next Suze Orman


In Financial Advice, Alexa von Tobel May Be the Next Suze Orman

Photograph by Charlie Engman for Bloomberg Businessweek

(Corrects description of von Tobel's degree)

Alexa von Tobel walked out of a blizzard and into her Greenwich Village office space on Feb. 8, brewed a cup of tea, and recited a list of her appearances in 2013. There was the design conference panel in Munich, a speech to the William Morris Endeavor staff in California, a Today show spot in New York—each time, she spoke on the topic of personal finance. In the past eight days, Von Tobel says, she’s been to four cities, and after the weekend she’s due to guest-teach a class at the University of Maryland. “That’s sort of a normal week in my life, just to give you a sense,” she says, bobbing the tea bag.

Von Tobel, 29, is the founder and chief executive officer of LearnVest, a four-year-old startup that in September became a registered investment adviser with the Securities and Exchange Commission—the latest personal finance site to go beyond offering simple budgeting tools to advising clients directly on what to do with their money. Services such as Mint.com have become popular with features that track users’ purchases and spit out pie charts on retirement progress. LearnVest offers the same features, but now clients who pay a setup fee (as much as $399) and then $19 a month can call or e-mail the staff of certified financial planners for personalized guidance. The advisers don’t recommend specific stocks or mutual funds, but they will work with customers to tailor their strategies on portfolio balancing, retirement, estate planning, and other topics. The company, which declines to say how many paid customers it has, says the site has a total user base of a few hundred thousand. Advisers earn a flat salary, with bonuses tied to customer satisfaction.

At the same time that banks are rediscovering wealth management for millionaire clients as a lucrative, low-risk business, a handful of startups are attempting to broaden the category to include the not-quite-so-rich, with assets in the six figures or less. Von Tobel’s firm faces some formidable competition, including Personal Capital, the brainchild of former PayPal (EBAY) and Intuit (INTU) CEO Bill Harris, and NestWise, backed by LPL Financial (LPLA), an organization of some 13,000 financial advisers managing $373 billion in assets.

In the crowded personal finance category, LearnVest initially drew attention thanks to Von Tobel’s shrewd decision to focus on women. It helped distinguish the site, attracted investors, and made Von Tobel into a rising media star as an expert on women, budgets, and the psychology of spending and saving. As a result, sometimes it’s difficult to tell which is the more successful product, LearnVest or Von Tobel herself.

A former trader at Morgan Stanley (MS), Von Tobel quit Harvard Business School to start LearnVest in 2008. Despite the recession, she lined up seed funding from three high-ranking Goldman Sachs Group (GS) veterans who had formed Circle Financial Group, an organization of women investors. One of the founders, Ann Kaplan, had led a Goldman Sachs group that concentrated on women clients; she’s now LearnVest’s chairman. Subsequent funding came in two rounds from Accel Partners, for a total of slightly less than $25 million.

Along the way, Von Tobel has appeared on a torrent of TV shows and magazine lists—Inc.’s “30 Under 30: America’s Coolest Young Entrepreneurs,” Vanity Fair’s “Next Establishment” index, Marie Claire’s “18 Women Changing the World.” Random House will publish her first book, a guide to getting one’s financial house in order, later this year, and a monthly money column begins in the next issue of Cosmopolitan. She met Cosmo Editor in Chief Joanna Coles at an event at Ruth’s Chris Steak House (RUTH) in New York, answering audience questions about the psychology of spending. “At the end of it, there was a line down the stairs of the restaurant,” Coles says. “When you talk to her, it’s a bit like talking to a Roman candle, just fully on fire, and all sorts of interesting colors are coming out of her.”

For a startup still getting off the ground, and now employing financial planners across the country, the free publicity is invaluable; that’s equally true for Von Tobel. If the company goes bust, the business of being her is still well capitalized. “Clearly she should have her own television show,” Coles says. “And she’d be very good advising big financial companies on how to approach women.”

LearnVest’s board and formal advisers include executives with ties to Goldman Sachs, Omnicom Group (OMC), and dot-coms such as EHarmony, the Huffington Post, and DailyCandy. “Because of her connections, starting with Kaplan, she was one step, two steps closer to bookers, producers, editors who would put her in magazines,” says adviser Betsy Morgan, president of TheBlaze, Glenn Beck’s website. Von Tobel approached Morgan when she was CEO of the Huffington Post. “I thought she was enormously strategic,” Morgan says. “ ‘How do I think about getting brand awareness, how do I think about media, how do I think about PR?’ It’s really nice to be able to say to your mom, ‘Hey, I’m on the Today show’—but it’s more meaningful to say, ‘I picked up X number of customers.’ ”

Von Tobel grew up in Florida and graduated from Harvard College (her thesis was magna cum laude plus) in 2006, during a period that produced a burst of entrepreneurialism among women there. Plus, unusual similarity in first names: Alexa Hirschfeld launched Paperless Post, a classier Evite, in 2008, and Alexis Maybank and Alexandra Wilkis Wilson co-founded Gilt Groupe, the luxury e-tailer, in 2007. In New York’s small venture capital sphere, their cluster of beau monde enterprisers is even tinier. Von Tobel’s wedding this spring will feature a Paperless Post bridesmaid and the co-founder of Dannijo, a jewelry line that does its marketing on social media, as maid of honor.

Even competitors are impressed with LearnVest. “They’re a comrade in arms, they’re another of the couple of players that are trying to use connected tech to change the way financial advice and financial services are delivered,” says Personal Capital’s Harris. The challenge for LearnVest now is whether the safe, universal guidelines it has been dispensing to users—pay off high-interest debt first, save up an emergency fund—can translate into individually tailored advice on taxes and how to balance a mixture of stocks and bonds. Von Tobel thinks the market is large: Ninety-nine percent of Americans have less than $1 million in assets, she is fond of saying, and few feel they have a source of reliable, independent financial counsel. “I’ve never sat across from someone who hasn’t been like, ‘My mom needs this,’ or ‘Wow, my husband and I need to get this immediately,’ ” Von Tobel says.

She recently passed the 10-hour CFP exam and three-hour Series 65 exam—the latter a Financial Industry Regulatory Authority test that qualifies her to dispense paid investment advice. Von Tobel says she took 15 calls in the previous week from LearnVest customers, ranging from the well-off to some in dire straits. One memorable conversation came with a user who had lost her job and wanted to create a financial plan before breaking the news to her family. “This is a genuine, genuine passion, and so this isn’t an upbeat persona that I have to really put on,” says Von Tobel. “The world could fall apart around me, our money could go away, and I would still be sitting here doing the exact same thing.”

The bottom line: With LearnVest, Von Tobel is creating a financial advisory service for the masses—and her own brand as a media star.

Summers_190
Nick Summers covers Wall Street and finance for Bloomberg Businessweek. Twitter: @nicksummers.

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