Future of Investing

How Northwestern Mutual is using LearnVest to build advisory services

  • Northwestern mutual temporarily shut down LearnVest to let it focus on integrating LearnVest's technology and expertise into its own products
  • The abruptness of the shutdown drew the ire of some LearnVest customers on social media

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How Northwestern Mutual is using LearnVest to build advisory services

Northwestern Mutual is growing its advisory services, building on the technology and expertise of LearnVest, which is currently shutting down and preparing for a rebrand as a content site this year.

In a statement, Northwestern Mutual said it wants to serve customers wanting an “end-to-end experience” with a human adviser using LearnVest’s digital planning platform, alongside a new content site. The integration also allows the parent company to concentrate on full-scale financial planning — a message consistent with a recent job posting that noted the company is scaling its technology and personal finance approach to reach millions of people across both LearnVest and Northwestern Mutual brands.

“Northwestern Mutual acquired LearnVest in order to build an in-house financial planning tool in order to rebrand itself away from insurance and into holistic planning,” said Ashley Foster, founder of Houston-based Nxt:Gen Financial Planning. “After Northwestern Mutual acquired LearnVest in 2015, I really did not hear much about [LearnVest] anymore.”

Though the startup will lose its brand identity, the technology will reach more consumers when offered by an established player like Northwestern Mutual. LearnVest was one of the early digital personal finance tools that sought to reach underserved customers; it launched as a personal finance site for women nine years ago and grew to become a digital personal finance app with planning services for a $19 monthly fee. Discontinuing the financial planning service will let Northwestern Mutual focus on building out its own advisory products, analysts say.

“It was to be expected that by paying $250 million for the startup, they’ll want to get maximum value out of it for their business — its a natural next step,” said Aite research director Alois Pirker. “Digital advice and experience is an asset in the learning process for Northwestern Mutual and having that available is huge step forward.”

As of March, LearnVest had 8,111 clients but no assets under management, according to regulatory filings.

LearnVest, which began as a financial planning and education startup, was acquired by Northwestern Mutual three years ago for $250 million. LearnVest’s acquisition took place alongside a wave of similar moves across the digital financial advice market, including BlackRock’s acquisition of FutureAdvisor the same year, and Invesco’s acquisition of Jemstep in 2016.

The company said it’s taking its content “to the next level” and “will be back soon,” in a holding message found on its main page. The shutdown of accounts was a shock to some customers who vented on social media about the news, communicated to them in an email from LearnVest founder Alexa Von Tobel Thursday. The email said all accounts — both consumer and business accounts — would be shut down by June 5, and the site would relaunch later this year as a “fresh, digital resource with content focused on helping people meet their financial goals.” Northwestern Mutual declined to comment.

One of LearnVest’s key differentiators was its fee-only advice model, and despite the relaunch, its association with a larger firm with other business lines and products may affect how consumers see the brand.

“This is the opposite of fee-only advice — it’s an interesting turn because I imagine the creator of LearnVest tried to create easily accessible financial planning at a reasonable cost,” said Lucas Casarez, founder of Fort Collins, Colorado-based Level Up Financial Planning. “With them being purchased by Northwestern Mutual, it’s empowering them to use the financial planning software to help them sell more products.”  

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