Advisor Case Study: Time Horizons and Financial Results

Rajesh Nerlikar April 29 2021

The following is adapted from Build What Matters.

After Morningstar acquired HelloWallet, there was a grand vision for how our two products would come together to provide even more value to consumers and clients.

HelloWallet had a product portfolio of web and mobile apps that helped consumers improve their financial wellness which were offered as an employee benefit. Morningstar’s Retirement group also had an employee benefit product portfolio: a set of robo advisors that used Morningstar’s Total Wealth methodology to regularly rebalance an employee’s 401(k) to increase the chances of hitting their retirement income goal. The two products seemed like a great bundled offering—as an employee climbed what we called the “financial wellness ladder” by building emergency savings and paying down debt, it would be great to offer a simple way to sign up for the robo advisor once they had put their first dollar into the employer-sponsored retirement savings account. However, we ran into a couple of issues related to the time horizon for this bundled offering.

First, since neither product was designed to be bundled with the other, the vision was to create a third product that combined the two feature sets together. Like many enterprise projects, this had a timeline of roughly two to three years. However, there were no technical estimates to validate if it was feasible. When we started producing the estimates, we realized that a couple of tech replatforming initiatives would be required to create an integrated product, pushing it to more like a seven or eight year vision. This was a problem because our revenue projections assumed this work would happen in two to three years.

Second, we ran into an issue with the user’s time horizon. Of course, everyone wants to be able to improve their financial wellness ASAP by building savings and paying down debt. We started thinking about the implications of it taking users a long time to work their way up the “financial wellness ladder.” Most Americans can’t even afford a $400 emergency, so building up a few hundred dollars in emergency savings would take them many months, if not a year or more. It’s the same with freeing up enough cash to pay down credit card and student loan debt. By the time employees had worked their way up to thinking about saving for retirement, it would have taken many years. Users would have likely lost patience, and the business value would not have materialized fast enough.

In the end, Morningstar sold HelloWallet’s financial wellness product to KeyBank, a large client whose retail banking product strategy revolved around differentiating with a focus on financial wellness.

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Written by Rajesh Nerlikar

Rajesh is a co-founder of Prodify and Principal Product Advisor / Coach. He is currently the VP of Product at Regrow. Prior to that, he was the Director of Workplace Products at Morningstar, a Senior PM at HelloWallet (which was acquired by Morningstar) and a PM at Opower (which went public in 2014).

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