Strategic Analysis of US Personal Finance & Money Management Market: A New Report

The need of managing finances became clear after the 2008 global crisis as most of the households faced financial difficulties. Keeping a budget and managing personal finances is often a time-consuming task and a struggle for many people. One of the most important factors of managing finances is financial planning which involve analyzing the financial position and setting long-term and short-term goals. But the process is still cumbersome for most of us. According to a study, one in two US consumers has said that they would like their bank or credit union to give them a single view of all their financial accounts in one place. In the past few years, personal finance apps have helped the consumers in tasks like paying bills and balancing & tracking of accounts. PFM and wealth management apps act as effective tools to track your data across multiple sources like banks accounts, payment cards; capture data beyond your cards and accounts and help establish your entire investment portfolio. With the advent of new PFM and wealth management apps, the personal financial management market is growing year-on-year.

LTP has come with a report focused on personal finance and money management market providing an overview of the recent trends in the US market. It also talks about the disruptions happening in the financial services across major segments, including banking, investment management, and insurance.

The report profiles 21 PFM companies such as Moven, Simple, Mint, LearnVest, Level Money, digit, Betterment and SigFig, spanning five key areas in terms of functionality and services based on an analysis of consumer trends and preferences on areas US consumers most value and seek in their financial lives.

*Company list is not exhaustive. Source: LTP

The major key functionalities and services offered by these companies in personal finance and money management market are:

- Income and spending analysis including cash flow

- Budget and goal setting

- Financial account aggregation

- InvestTech portfolio and

- Financial advice

In the report, the players are further identified into four categories based on the US mobile financial services market that are targeting specific functionality to US consumers, providing digital capabilities online or via mobile devices or both. Here are the identified categories:

▪ Mobile Banking: Digital capabilities for tracking spending, making payments and monitoring budgets; no physical bank branches.

▪ Personal Finance: Digital capabilities for tracking spend and income, along with budgeting. They are subdivided into two subcategories:

- Spend tracking and savings and

- Spend tracking, budgets, and savings.

▪ Personal Investing: Digital capabilities for creating an online investment portfolio based on a financial and risk profile.

▪ Wealth Management: Digital capabilities similar to personal investing, providing private banking and asset management functionality.

According to the research done in the report, the total investments made in the four categories for years 2013 through 2015 is ~ $ 681.6 million.

Source: LTP

The report also analyses and categorizes the private wealth management market on the basis of three tiers of investors:

1) Ultra high net worth (>$30 million) 2) Mid-tier millionaires (between $5 and $30 million) and

3) Average (between $1 and $5 million).

With the growing trend in utilizing mobile devices whether smartphones or tablets, security has been cited as the primary focus area by US consumers.

According to a study published by the Deloitte Center for Financial Services (Jan. 2014), 27% found mobile offerings for investment management account holders as extremely important or important while 36% cited as unimportant. Smartphones are used predominately to view balances/positions, alerts (account activity/security pricing, and stock prices); tablets are used predominately to research investments, trading and asset allocation/financial advice. 33% and 22% were extremely concerned to very concerned respectively for security in using mobile devices for investment management. (Survey group size: 1,488 investment account holders)

In addition, US consumers also want more personalized advice and guidance; additional technologies will need to be deployed to provide alerts, notifications, etc. to have them proactively manage their finances.

Key questions answered by the report:

1. What is the value chain of US mobile financial services?

2. Who are the market players in the personal finance and money management market?

3. What is the US market size of personal finance and money management market?

4. What are the US customer trends in personal finance and money management market?

According to the study conducted by LTP, the top four markets in wealth concentration are New York, Los Angeles, Chicago and Washington, DC. (MSA Group)

The following is the scope of the study:

1. Report Overview

2. Value Chain Analysis of US Mobile Financial Services

3. US Market Players by Category

4. US Market Size of Personal Finance and money management

- US Market Size of Personal Finance and money management: Interchange fees

- US Market Size of Personal Finance and money management: Wealth Management fees

5. US Customer trends in Personal Finance and money management

6. VC Investments in the US Personal Finance and money management Companies

7. Technology trends in Mobile Financing Services

8. Market Players - Company Profiles: Moven, Simple, LearnVest, Mint, Level Money, You Need A Budget, Hello Digit, Acorns, Even Responsible Finance, Qapital, Cashpath Financial, Debitize, Milestone, Motif Investing, SmartAsset, Hedgeable, Wealthfront, Betterment, SigFig, Personal Capital

9. Summary

10. VC Investments in the US Personal Finance and money Management Companies

11. Methodology