HelloWallet Holdings Set to be Acquired by Morningstar Inc. for $52.5 Million

On 29th May 2014, leading provider of independent investment research – Morningstar Inc – announced that entered into a definitive agreement to acquire HelloWallet Holdingsfor an sum of $52.5 Mn. When the transaction is completed in the coming days, Morningstar will pay $39.0 Mn since it currently has a minority stake in the company valued at $13.5 Mn.

Morningstar, via its advisory subsidiaries, is the largest provider of managed retirement accounts by participants served, with almost 1 Mn individuals enrolled. This acquisition will bring together HelloWallet's comprehensive financial wellness expertise with Morningstar's independent, research-based retirement advice to create a holistic retirement savings and advice offering, says the compay.

  • 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.
  • HelloWallet has a loyal and committed client base of retirement plan sponsors, such as Marsh & McLennan, United Technologies, and
  • It also has key relationships with leading retirement plan providers.
  • HelloWallet combines behavioral economics and the psychology of decision-making with sophisticated technology to provide personalized, unbiased financial guidance to over 1 Mn U.S. workers and their families through their employer benefit plans.
  • HelloWallet has about 50 employees in Washington, D.C., and Fellowes will remain with the firm in a leadership role.

'There is a strong mission and cultural alignment between Morningstar and HelloWallet. Both firms are independent, entrepreneurial, and grounded in academic research. 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, stated the Head of retirement solutions for Morningstar, Brock Johnson, in a press release. 'While we expect this acquisition to benefit our retirement clients and the participants they serve, HelloWallet's capabilities could provide value for many of Morningstar's clients, including advisors and asset managers.'

'Holistic advice is becoming a 'must have' capability, as employers increasingly look for integrated solutions across their retirement and healthcare programs. Today's routine financial choices are directly linked to tomorrow's long-term retirement, health, and savings decisions. We want to help people make the best decisions with their paychecks so they can actually have money to invest for their futures, commented Founder and CEO of HelloWallet, Matt Fellowes, in the same release. We're thrilled to become part of Morningstar, where we will be able to continue to grow our business and offer a total financial wellness and retirement planning solution for employers and their workers.'

  • Employees input their goals and priorities and add their financial information, including income, bank accounts, credit cards, retirement plans, insurance, and investments – via HelloWallet's website and mobile applications.
  • HelloWallet creates budgets as well as analyzes trends in financial behavior to recommend how members can prioritize financial decisions.
  • It also helps them identify ways to stretch their paychecks, and make the most of their benefits, such as health savings accounts, 401(k) plans, flexible spending accounts, as well as insurance.
  • HelloWallet also automatically alerts members when they need to make changes.
  • The majority of participants that utilize HelloWallet make quantifiable changes in how much they save, use available benefits, and pay off debt, says the company.
  • During the past year, the median HelloWallet member increased savings deferrals by 38%, according to the release.
  • HelloWallet has also found that its members pay off debt twice as fast after receiving the company's personalized financial guidance.