When LearnVest launched a few years ago, it was a site that promised to teach women important financial information.It was a fine idea, but when LearnVest raised $19 million last year, you had to wonder what investors were thinking. LearnVest’s traffic and revenue didn’t seem high enough to justify its $100 million valuation. And how big a business could financial content for women really be?
It turns out women-centered content was never really Alexa Von Tobel’s plan. It was just a cheap starting point for a young, bootstrapping entrepreneur.
Instead, Von Tobel was plotting something much bigger. She wanted to create the first-ever affordable financial planning company. The Harvard Business School dropout and former Morgan Stanley trader would use technology to shake up Wall Street.
Last year, she started making moves to accomplish that goal. LearnVest launched a product that looked a lot like Mint to help its customers visualise their savings and spending.
LearnVest spent the past six months becoming a registered investment advisor. It enables LearnVest and its 50 Certified Financial Planners to do almost everything traditional financial planners can do — except move their clients’ money. We assume that’s next on Von Tobel’s list.
Today LearnVest is officially the first-ever financial planner for the 99%. Heck, even the 1%.
“Being a registered investment advisor allows us to start giving investment advice and to maximise all of our customers’ investments,” Von Tobel says. “We’re bringing a subscription model for financial planning to the masses.”
Already, LearnVest is snatching up clients. The fact that there are 50 CFPs on staff gives you some estimate of paying subscribers. The CFPs go through a rigorous process before LearnVest will let them have access to their clients too. They go through extensive background checks, need to have passed multiple financial tests, and they have to undergo a writing and teaching test.
LearnVest already has millionaire clients. Von Tobel says LearnVest manages finances for clients who are extremely in debt, as well as those with millions of dollars in assets, all the way up to 8-figures.
Currently, LearnVest offers three plans for people who want their money managed affordably. There is a Budget Starter package for $89 that connects customers with CFPs for three months.
The 5-Year Planner package costs $349 and gives one-on-one access to a personal CFP for one year.
The Portfolio Builder package costs $599 and includes all of the 5-Year Planner benefits, as well as guidance around investment portfolios.
LearnVest also has a newly launched iPhone app so clients can manage their money on the go. There’s a dual browser screen so financial planners and clients can access the accounts at the same time and walk through the planning together.
If you’re familiar with the financial planning industry, you know LearnVest’s prices are pretty cheap. Oftentimes fees are between 2 and 2.5 per cent of your account if you have less than $100,000 under management. If you’re worth more than $500,000, you may be paying a financial planner closer to 1.5%. Either way, you’re spending thousands of dollars annually to get sound advice.
“We’re providing planning to a huge audience who’s never had access to financial planners before,” says Von Tobel. “This was always my plan for LearnVest. It was in my very first pitch deck.”
Here are some screenshots of LearnVest’s mobile and web products:
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