With the advent of the Internet, our lives have changed forever. Amazon is redefining how we buy anything including pencils to power tools. Whether you like it or not, wealth management has also begun its inroads on the Internet. The brilliant idea that you can aggregate your accounts from various investment sources to get a holistic view made Aaron Patzer super rich in just few short years after he launched mint.com in 2006 and sold it to Intuit for whopping $170 million.
That brilliant idea has ushered a new breed of ‘do-it-yourself’ wealth management tools. Wela is one of those online robo wealth management tools and, for most part, it is free.
You can not only aggregate all your investment accounts but also credit card accounts and other liabilities to get a view of your financial well-being.
When I was introduced to Wela by Wes Moss who is a CFP and a chief investment strategist at Wela — by the way, Wela is an old English word for wealth — I felt that it is worth sharing the idea with those who want to monitor their own financial nest egg. Wes also runs a popular Sunday money talk show on flagship radio station WSB in Atlanta.
Without further ado, I’d like to share my interview with Wes Moss.
Note: I have not been paid by Wela; I interviewed Wes simply because Wela offers free online wealth management tools that you can benefit from.
Me: Welcome Wes. The concept of Robo-advisors is growing popularity due to the growth of Internet but for the vast majority of average Americans, it is hard to fathom that Wela (also referred to as YourWela) and other Robo-advisors such as Mint.com can offer service for free. Please explain the motivation for your company to build Wela and how it can help an average investor.
Wes: Getting financial advice has a reputation for only being available to the most affluent or rich individuals. Much of the advice I see in the investment advisory world can be very confusing to individuals. And this can lead to individuals “buying products” or going down different advice paths that aren’t truly for them. What we wanted to do was to provide an outlet that gives access to objective and relatable financial content and tools that everyone could use. Rather than tailoring it just to the ultra-rich, we want to provide the masses with an outlet that they can trust and relate to.
And yes, we provide a platform of tools, content, goal tracking and aggregation capabilities for free. Studies show that 2/3 of the individuals actually want advice and help when it comes to managing money. The other 1/3 will always be, what we consider as do it yourself investors. We foresee individuals gaining comfort with the Wela brand over time, and at some point in their investment lifecycle (when their financial situation becomes more complex) we will be there to help.
Me: How does Wela compete with Mint? As I understand that the underlying aggregation engine has been built by Mint. If so, what is Wela’s competitive advantage?
Wes: Think of Mint.com as a tool for you to become a better budgeter. Think of Wela, as a digital advisor to make you a better investor and grow your net worth.
So, the infrastructure that allows for our users to link their accounts from over 19,000 financial institutions is the same infrastructure that mint.com is built on. The difference is that mint.com was really built for users to see cash flow and budgeting information. Yes, Wela will allow you to aggregate investment accounts, real estate values, and debt information from multiple institutions, but, our financial portal and tools are designed for you to be a better investor and grow you net worth…not to just be a better budgeter. Creating savings and investment related goals requires an element of investment advice and planning which is where we specialize, and differ greatly from Mint.
Me: What are the salient features of Wela? Will it provide me holistic view of my overall portfolio and asset allocation? Will it help me save on fees or lower expense ratio? Will it provide me a roadmap for my retirement goals?
Wes: At yourwela.com users are able to gain a holistic view of their entire financial situation. Investments, Cash, credit card debt, mortgage debt, and real estate values. We will even pull in the latest z-estimate from Zillow for any real estate that you own.
The portal at yourwela.com also allows you to create financial goals that are most relevant to you. Whether it be buying that house, saving for your kids college, getting out of debt, figuring out how much to save each month to get to that first million or how much you need to save to retire “early”. All these tools allow users to track their progress within the portal. This also helps with holding users accountable to their own goals.
But on top of all this, you have the resources to reach out to a real advisor with any questions you may have in regards to your situation. Whether it be via the chat functionality on the site or via the game plan tool (which allows users to input certain information and then get suggestions tailored to them drafted by a real advisor) users have access to real people that can relate to them and their situation.
Me: With the growth of the Internet, we all are worried about our personal information and identity. What makes Wela a safer portal so that an average investor feels secured about his or her personal information?
Wes: This is a great question and a really relevant one. It is also one of the main reasons we wanted to partner with the people that support the infrastructure behind mint.com. The company that provides the aggregation software is Intuit – a gigantic software company that owns mint.com, quicken, and TurboTax. This partnership gives us confidence in the security of the platform.
But more importantly, yourwela.com is a read only site. What this means is that when users provide their financial institution credentials they are just allowing for yourwela.com to report back a surface level picture of their financial position at that particular financial institution. We do NOT provide any ability for users to perform transactions on the site. And we do NOT store any of the user’s credentials on the site.
Right after a user provides their credentials they are sent to Intuit who then contacts the financial institution for the surface level picture and that is the only thing delivered back to us.
And finally our site is encrypted at bank level security. This is why users see the same green bar next to our URL when on our site as they do when they are on other financial institution sites.
Me: Being a CFP, what do you think about the future state of the wealth management? What other services does Wela offer to those who want your help to improve their financial future?
Wes: I think of the digital advisory space today, much like the 1980 and 1990s when we saw the rise of discount brokerage firms like E-Trade and Charles Schwab. E-Trade and Charles Schwab didn’t put big Wall Street investment firms out of business. Instead, it created an entirely new slice to the overall wealth management pie. The same evolution is happening today with both digital advisors and pure robo advisors. A digital advice model will make our overall industry more efficient, and become an entirely new vertical within the wealth management industry. In turn, I see digital advisory firms tapping into a whole new base of potential investors that may have otherwise not turned to traditional investment advice for help.