The transaction will bring together HelloWallet’s financial wellness expertise with Morningstar’s independent, research-based retirement advice to create a holistic retirement savings and advice offering, Morningstar said. Morningstar, through its advisory subsidiaries, is the largest provider of managed retirement accounts by participants served, with almost one million individuals enrolled.
Brock Johnson, head of retirement solutions for Morningstar based in Chicago, tells PLANADVISER he believes the two firms are a “natural strategic fit” with HelloWallet assisting with savings strategies and Morningstar then complementing those strategies with investment advice. Aside from Morningstar’s managed account offerings, Johnson believes the acquisition will provide “ a broader solution set” that answers the demand by the market for a more holistic approach to saving and investing, offering more comprehensive services to participants.
Through HelloWallet’s website and mobile applications, employees input their goals and priorities and add their financial information, including income, bank accounts, credit cards, retirement plans, insurance, and investments. HelloWallet creates budgets and analyzes trends in financial behavior to recommend how members can prioritize financial decisions, identify ways to stretch their paychecks, and make the most of their benefits, such as 401(k) plans, health savings accounts, flexible spending accounts, and insurance. HelloWallet also automatically alerts members when they need to make changes.
Johnson says, “There is definitely value in the HelloWallet brand. In addition to tools currently offered by HelloWallet, I can see such tools being expanded over time, whether they relate to health benefits, participant engagement or just generally helping participants achieve better outcomes.”
HelloWallet was founded in 2009 by Dr. Matt Fellowes, a consumer finance expert and former Brookings Institution scholar. In January 2012, Morningstar became a HelloWallet investor with $6.75 million in Series B funding. Fellowes will remain with the firm in a leadership role.
HelloWallet has a loyal and committed client base of retirement plan sponsors, such as Marsh and McLennan, United Technologies, and Salesforce.com, as well as key relationships with leading retirement plan providers. As for previous collaborations with firms such as Vanguard (see "Vanguard Partners with HelloWallet for Financial Education”) and Aon Hewitt (see “Aon Hewitt Teams with HelloWallet”), Fellowes tells PLANADVISER, “I don’t see this acquisition having any effect at all on those collaborations. We are thrilled with those partnerships, and see them being maintained and grown going forward.”
Johnson expects the acquisition to benefit retirement clients and the participants they serve, in addition to providing value for advisers and asset managers. “We want to bring together HelloWallet’s expertise in behavioral and consumer research and analytics with Morningstar’s investment management capabilities to create the first holistic solution for the retirement market. HelloWallet’s done a tremendous job—its unique approach to financial wellness has changed the way employers view benefits programs and the way employees manage their daily finances. Working together, HelloWallet and Morningstar have an opportunity to significantly improve the financial and retirement outcomes of workers,” he says.