Will HelloWallet Transform Online Financial Advice?

The Bill Clinton-endorsed startup, offering financial advice for the rest of us, could get a boost as HR departments look for low-cost ways to serve employees' need for unbiased guidance

By Keith Epstein

Even in good times, it can be tricky to navigate the waters of personal finance. And yet, amid the devastation wrought by the Great Recession to investment and college-savings accounts—not to mention dashed vacation dreams and retirement goals—only a fortunate minority of Americans with substantial incomes have access to a trusted financial adviser.

Despite the popularity of online financial sites and the offerings of many employers’ human resources departments, most workers have nowhere to turn for independent comprehensive advice on the best methods and places to save and invest. Online sites often have arrangements with banks and lenders who offer "bounties" when consumers sign up. Employers, too, offer services that are sometimes hard to navigate or understand, focus primarily on retirement rather than other financial needs, and are linked to particular providers who may not offer the best deals to employees.

That could change soon. Established vendors such as Bankrate, Lending Tree, and Mint, as well as the likes of Goldman Sachs (GS)-owned Ayco Company, a financial counseling provider that is popular with employee benefits departments, just might have an upstart startup to fear: For-profit HelloWallet. It’s a simple self-service site without any business affiliation or hidden arrangement with established financial institutions that helps users identify their financial goals while providing real-time comparisons of virtually all available checking, savings, and loan products from 80,000 institutions—and at a relatively low cost to HR departments.

A Low-Cost Counseling Option for HR

HelloWallet will be offered starting in May at a cost of less than $6 per head—good timing, say some workers’ benefits specialists, for employers eager to soften the psychological and public relations blow that can come from cost-saving moves such as freezing wages and benefits, shutting down pension plans, or cutting 401(k) contributions. It may also be attractive for HR benefits personnel who have grown leery of implied endorsements of financial institutions that may not be offering the best deal for their workers—and whose troubles could wind up in headlines, adding to worker distrust.

"HR departments don’t have anything like this now," says Mercer Consulting principal Linda Delivorias, who evaluates 401(k) and other financial planning products for major employers. For minimal expense, it can help communicate concern for the financial well-being of employees. "Low-cost employee relations programs can be critical. In a tough economy, you want to maintain a sense of paternalism. Meanwhile, it avoids product-pushing," says Delivorias.

Some large employers already seem enthusiastic. Jeremy Wall, a management consultant at Chicago-based Stax, says HR departments mostly are drawn to the startup's independence and affordability, especially at a time when "HR departments are getting crushed and losing head count and money to do stuff. Companies who want to do something with financial literacy in these hard times are seeing there's a way to do it for at least half the cost."

So far, HelloWallet has signed business-to-employer deals with the city of Los Angeles, urban developer Community Builders, and the Rockefeller Foundation. But it is in discussions with more than a dozen major retailers and other big national brands, including some whose working-class employees' financial woes have added massive administrative costs from health-care to absenteeism.

Free Subscriptions for Working Poor

And a former President's endorsement can't hurt. During Bill Clinton's annual philanthropic confab of executives and government officials who paid $20,000 apiece to attend his Clinton Global Initiative event in late September, HelloWallet was among the innovations highlighted by the former president, who plugged it on CNN and featured the company as an example of an organization that is "harnessing innovation" for global development. That stems from HelloWallet's determination to donate one of every five subscriptions to the nation's working poor, who may benefit from its use at inner-city financial counseling centers.

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