HelloWallet, the personal finance platform that aims to “democratize savings and investing,” hired six employees this month. The new hires bring the staff roster to 40.
The subscription-based service is currently available to companies and individuals, says Matt Fellowes, founder and CEO of HelloWallet, but distributing through companies is HelloWallet's main distribution channel. “Companies distribute the program to their employees and then we help those employees meet their goals, whether they are retirement savings or health care plans.” HelloWallet does not manage any funds.
Fellowes started the company after a stint as a fellow at the Brookings Institution. Being a part of the think tank at Brookings, he says, helped him realize that corporate health is tied to employees’ financial health. “A lot of corporate outcomes,” Fellowes explains, “such as 401K savings plans and attrition, are directly related to the financial health of the employees. So if we improve the financial health of the employees, we’ll improve the company’s health as well.”
For example, an employer spends $200 million on 401K-matching contributions, but $50 million is being pulled out by employees to pay bills or to pay for emergency expenses. “[HelloWallet] is hired to lower that,” Fellows says. “We help employees make better decisions so that they don’t have to dig into their 401K.”
On the healthcare front, HelloWallet can help employees choose the right plan for them, often between a high-deductible preferred provider organization (PPO) and a traditional health maintenance organization (HMO). Fellowes says that employees are sometimes better off with the PPO, but it requires more money up front. That’s where a health savings plan can come in. “We’re an independent switchboard between vendors and employees,” he explains. “Being the intermediary in the market is disruptive and it creates transparency.”
A typical employee saves just 1.5 percent of his or her paycheck, according to Fellowes. “We’ve been able to increase that to 4.5 percent,” he says. For someone earning $50,000 annually, that means saving $2,250 instead of $750.
But HelloWallet's tools aren't just a way to make employees feel better about their money. Financially secure employees are more productive at work, the company says, and those who are steered toward a cheaper health care plan both save money and lower the employers' health insurance premiums--a win-win for everyone.
Since HelloWallet is cloud based, Fellowes and his team are able to roll out new products and optimizations every 30 days. “We can adapt to what works and what doesn't, which is key to our business model,” he says.
HelloWallet is already being used by 34 Fortune 500 companies. Fellowes plans to launch the product with forty Fortune 1000 companies and bring another five to 10 people on board later this year.