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New models of online investment advice and services- part 2 Print

Examples of categories of new entrants

We will now look at some of the new entrants which we have divided for convenience of presentation into 7 categories. For bthose readers who do not wish to plow through all 7 categories we encourage you to focus on the first 2, which are most aligned with our own philosophy.

1-1-   1- Financial planning advice only

This is one of our favorite categories, since it addresses a fundamental need of many retail investors, how to find low cost, one-time independent financial advice.

These entrants are aimed at DIY investors who are looking for basic asset allocation / general financial advice which the investor then uses to manage his/her own portfolio. These entrants have limited costs since they generally offer no personalized advice in person, but basically put investors in contact with pre-screened  financial planners who provide advice (but no actual investing) by phone or online.

Here are a few examples of entrants in this category; in general, see  the article by Emily Glazer in the Wall Street Journal or as a PDF doc.22xx- Glazer 2013 online investing- LearnVest.pdf.

LearnVest  provides since 2012 budget and financial (mainly asset allocation) advice through phone and online access to one of a small number of  financial planners identified on the site at low monthly fees together with a one-time set up fee which varies according to the level and length of support. The entry-level plan for $69 provides a phone consultation, customized budget breakdown and to-do list, and three months of unlimited email support. The middle offering for $229 provides an initial phone consult, five-year financial plan, one follow-up phone call to review progress, and six months of unlimited e-mail support. The last plan for $349 adds in three phone check-ins and one year of unlimited email support.

LearnVest  emphasizes that it provides access to CFP-qualified financial planners, but plays no role in the subsequent investment process:

No Conflicts- We only sell financial advice. Our sole responsibility is to our clients….We do not hold assets or place trades for our clients. We do offer you detailed portfolio analysis, and help you implement our recommendation with the provider of your choice. In other words, we don't select the securities for you, but we will develop an asset allocation strategy that meets your needs, and give you step-by-step guidance on how to put it into motion in a smart, efficient way.

Here is how  Emily Glazer et Tara Bernard describe this new entrant:

On Wednesday, female-focused personal-finance website for the first time plans to roll out three new services that will allow its roughly 700,000 monthly visitors to develop financial plans with certified financial planners for as low as $229–a fraction of the cost of many similar services. The financial advice business is a complex and competitive market that has suffered its share of past online failures. But by using Web technology and phone consults, the New York start-up hopes to democratize an industry that has been seen by many as costly and intimidating. A two-year-old start-up that has raised $25 million in venture capital from Facebook investor Accel Partners and other firms, LearnVest had previously restricted itself to offering women online tools and courses on money management. Glazer  or PDF doc.22xx Glazer 2013 online investing- LearnVest.pdf


In the New York Times Bernard reports  “A start-up aims to bring financial planning to the masses”  or as a PDF  doc.22xx- Bernard NYT 2013 Learvest and others.pdf :   LearnVest is looking to disrupt the ‘advice’ industry by arguing that “financial advice shouldn’t be a luxury”; they are trying to deliver that advice by a combination of ”technology and bona fide certified financial planners” at an affordable price. Instead of charging the usual $1,000-3,000 for a financial plan “LearnVest charges $399 upfront fee and $19 a month, or $608 annually”. What is different here, from some other technology based online companies in the same general space, is LearnVest’s focus on financial planning first. They analyze the clients’ spending and generate a customized financial plan including: debt elimination, savings plan for child’s education and retirement saving targets. The service also includes ongoing feedback mechanism to monitor/notify if client falls off the wagon; they also specify an overall target asset allocation to stocks and bonds without naming specific funds at this time. The firm hopes to “revolutionize financial planning for the masses”. The company is a Registered Investment Advisor. (By putting the horse(financial planning) before the cart (investment management) where it belongs, they got the priorities the right way around, and I hope they succeed in creating better outcomes and perhaps even change the ‘advice’ industry). is an adviser search service offered by a company which is a federally registered investment advisory firm that can provide investment advice. The company offers to connect clients by web and phone to pre-screened financial advisors for inexpensive flat-fee advice. Advice can cover investing, financial planning, taxes, mortgage, insurance and employee benefits. The company has pre-selected various advisers with at least 3 years of relevant work experience, required licenses and a clean regulatory history. Advisors only provide their services by email and phone. According to Glazer, the advisers charge on an hourly basis and charge between $100 and $300 per hour.

The Garrett Planning  Network  is similar to It also offers access to a network of financial advisers.

Founded in 2000, the Garrett Planning Network has grown into a national network of hundreds of hourly-based, Fee-Only financial planners. Members of the Garrett Planning Network provide their advisory services on an hourly, fee-only basis. Members do not accept sales commissions or any compensation other than directly from their clients. Clients pay only for the time an advisor works with or for them. Garrett Planning Network members’ fees are based on the actual time involved in meeting with a client in person or via the phone, researching and analyzing that client’s current situation, and providing specific recommendations and implementation assistance (if appropriate). Hourly rates vary by Garrett member. Members, however, provide prospective clients with firm quotes of their estimated fees at the end of an initial no-obligation Get Acquainted session.

Glazer describes and The Garrett Planning Network as follows:

Other services, such as The Garrett Planning Network Inc. and offer access to certified financial planners who charge $100 to $300 per hour, says Eleanor Blayney, a certified financial planner and the consumer advocate of the CFP Board, which grants the certified financial planner designation. Susan John,  a certified financial planner and national chair of the National Association of Personal Finance Advisors, says normally it takes anywhere from five to  40 hours to produce a financial plan, depending on whether a client’s documents such as tax returns and insurance policies are in order.….Ron Peremel, founder and chief executive officer of, says the biggest difference with the LearnVest offerings is that his company is a federally registered investment advisory firm that can provide investment advice. Sheryl Garrett, founder of The Garrett Planning Network, expects LearnVest’s offerings to thrive within its community of women, but she says many people will be more comfortable dealing with a financial planner in person. Glazer or as a PDF doc.22xx- Glazer 2013 online investing- LearnVest.pdf.

Last Updated ( Saturday, 02 November 2013 )
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