Who We Are
Our Story
HelloWallet was created to democratize access to honest, high-quality financial guidance for everyone. We were inspired to do this when we discovered that most people in the U.S. are collectively losing billions of dollars unnecessarily in bad deals because they lack access to such guidance. Nearly all of the free information and services online are just fronts for banks to peddle products. HelloWallet is a new alternative that turns the tables and puts banks to work for you.
But the roots of our story go back much further.
In the 20th century, the U.S. experienced a broad and sustained expansion in access to nearly every financial product, from the most basic to the most complex. In the 1960s, for instance, only about 60 percent of the U.S. public had checking accounts and about 20 percent had access to equity markets. Today, over 90 percent use a checking account and over 70 percent of households invest in the stock market. That same trend was repeated across nearly every financial product or service with one important exception: financial guidance. Just as in the 1960s, only about 20 percent of U.S. households talk to a financial advisor today and nearly all of those households are wealthy. Financial advice has not democratized the way that other financial services have.
Lack of access to financial advice creates massive roadblocks to economic mobility and sweeping economic problems for the country more generally. In the most dramatic recent illustration of these problems, a record-setting 4.5 million foreclosure notices were sent to U.S. homes between 2007-2009, contributing to a global economic crisis nearly as severe as the Great Depression.
Yet, as damaging as the foreclosure crisis has been for households and the country, it is only part of a systemic problem afflicting nearly all middle- and low-income workers who are unable to convert their hard work into economic mobility and prosperity.
Recent research by the Brookings Institution, Harvard University, and others has found that there are now hundreds of billions of dollars unnecessarily lost by middle- and low-income workers because of avoidable financial missteps. Among the dozens of examples: economists at Harvard found that more than a third of fixed-rate mortgage borrowers were paying at least two percentage points above the available yield; about 70 percent of all deposits sit in non-interest-bearing accounts, forfeiting billions of dollars in interest; and over 20 million households reported in 2007 that they held more than one month of their annual income in a no- or low-yield checking or savings account and had no other investments in better-performing savings products.
Workers have significant difficulty connecting with the products that can help them convert earnings into prosperity. Brookings’ Retirement Security Project found, for instance, that 20 percent of workers eligible for 401(k)s choose not to participate and that only 1 percent of eligible workers contributed the maximum amount.
Collectively, these difficulties indicate that most workers are now struggling to convert their wages into economic mobility, losing hundreds of billions of dollars in the process. Worse, millions of mostly middle- and low-income families are exposed to catastrophic financial threats that could be avoided with sound financial advice. These problems in turn create large-scale economic costs.
Professional financial advisors could help households and enterprises avoid these expensive problems and bolster their financial health, yet only 20 percent of American households–most of whom are wealthy–use financial advisors. The gap between need and demand exists in large part because the financial advice industry is very expensive, unnecessarily complex, and a mystery to many. The industry is also dependent on a business model that self-selects high-income individuals who have the financial sophistication to navigate and search out providers who are for the most part sole proprietors, without the means or inclination to reach a wider audience.
In response to this gap, Matt Fellowes, the founder of HelloWallet, developed a new, scalable business model in the financial advice industry that could sustainably serve the tens of millions of households that currently lack access to financial advice. By utilizing powerful new technology, new findings from behavioral economics, and a network of partnerships with industry experts, HelloWallet is able to offer high-quality, individualized financial advice at an affordable price. HelloWallet also supports a pledge to provide free financial advice to one low-income family for every five paying subscribers.
Through these innovations, HelloWallet strives to democratize access to financial advice and help put millions of hardworking Americans on a path to prosperity.
