Who or what will fund the next round of PFM?

November 25, 2009

Personal financial management provider Wesabe has stepped up its efforts to sign on more financial institutions with the launch of a website to support direct sales of its Springboard platform.

Springboard offers a cloud-based services model for financial institutions that want to offer budgeting, account aggregation and widgets to customers, without hosting a platform in-house.

The market for personal financial management appears to be splitting into two groups – direct-to-consumer and bank-driven. Other white label PFM offerings are available from Geezeo, Jwaala and Yodlee. Locally Sandstone Technology and eWise are also working to offer an expanding range of personal financial management tools.

This makes Mint.com (recently bought by Quicken) one of the few remaining direct-to-consumer platforms.

Mint.com founder Aaron Patzer says Mint’s success has been driven by its independence, and in this interview with Online Banking Review, argued while personal financial management tools will continue to be rolled out by banks, independent providers will always have the ability to save consumers more money. “Banks will always be biased. They will always push their own products.”

For now, few banks are offering even limited budgeting and comparison tools. In Australia ANZ offers aggregation via its Yodlee powered Money Management site. At last count (in June) it had 30,000 users, a drop in the ocean compared to the millions now banking online.

Wesabe has been offering Springboard since March and so far only counts a handful of credit unions as customers.

Wesabe clearly gets that personal financial management needs to go beyond aggregation, but perhaps the secret to greater uptake lies in integrating these tools across our entire lives – incorporating tax (as Mint.com is doing with TurboTax), and even retirement planning (as Simplifi appears to be doing).

A number of wealth management groups in Australia are currently considering how they can integrate PFM tools into the service offered by their financial planners.

It’s something I hope to discuss with Xero founder Rod Drury, ahead of his presentation at next week’s Future of Money conference.

Xero is preparing to enter the PFM space next year with Xero Personal, on the back of successfully delivering small business people the kind of tools they need to take control of their cashflow.

What do you think?

Should PFM be offered by banks, or left to independent providers?

Is tax planning the silver bullet for PFM providers? Could wealth managers successfully use PFM to offer a better service?