Advisor Intelligence

BloombergBlack Out; LearnVest Gets Infusion of Capital

We can already hear the advisors gloating. Even before coming to market, Bloomberg announced it would cancel its online wealth management platform for consumers, BloombergBlack. But this doesn’t signal the end of online advice portals; LearnVest, a personalized financial planning tool, just raised $16.5 million in investments, according to TechCrunch.com.

TechCrunch.com writes that LearnVest received investments from existing investor Accel Partners, as well as newcomers American Express Ventures, Claritas Capital, Ed Mathias, founding member of The Carlyle Group, and Todd Ruppert, former CEO and President of T. Rowe Price Global Investment Services. The startup now has a total of $41 million.

LearnVest is trying to position itself as the Weight Watchers of financial planning:

The company offers the LearnVest Action Program, which is a seven, step by step program that takes you from cutting expenses to budgeting for goals to investing your money. All users get a certified financial planner who gives them specialized attention based on their financial needs and goals. Von Tobel adds that each of these advisors has gone through training and is empathetic to all financial situations. Financial plans starting at $89 for the budget version. The five-year plan is $299 and the portfolio builder is $399.

We here at WealthManagement.com thought BloombergBlack—with the backing of Bloomberg LLC, arguably the world’s largest aggregator of data and analytics—had potential. I’ve got to hand it to advisor Scott Bell, author of the blog I Heart Wall Street, who saw the writing on the wall after using a beta version of the service. Just last month, Bell wrote, “This is not the disrupter you’re looking for.” He pointed out that the service seemed designed by a committee, and was too complex for someone who didn’t know what they were doing, yet too simple for someone who did.

Here’s a excerpt from his review:

It’s not a total fail, but given their premium to market against other sites which are often free, this seems like a non-starter.

For example, right now I labeled $18k in monies as earmarked to buy a house in 16-25 years. At their projected growth I’ll have about $100k at the end of this timeline; where according to their WealthCheck service I’ll be successful, buying a house — for $100k. Where on earth I’ll be buying this palatial estate is beyond me (Amityville maybe), but according to their goal planner I’m in great shape and On Track.

The WealthCheck service also will monitor your portfolio for necessary changes on an ongoing basis, but the reality is, I don’t see how this isn’t a total GIGO (garbage in/garbage out) type of situation given the elementary nature of this online planning service.

Will other online advice ventures like LearnVest succeed, or fizzle out? If these firms really want to be wealth management disrupters, they'll have to think like a financial advisor, lower their fees, and make the user interface as friendly as possible.

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Diana Britton

Diana Britton is the Managing Editor of WealthManagement.com and REP. Magazine, covering asset management and independent broker/dealers from all angles. A native of Los Angeles, she now lives in...

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