Northwestern Mutual purchases LearnVest

The web-based advice platform will still maintain its own brand identity and its business relationships

Mar 25, 2015 @ 4:00 pm

By Darla Mercado

+ Zoom

Northwestern Mutual Wednesday announced it will acquire LearnVest, an online advice platform that also provides one-on-one financial counseling through financial advisers.

Terms of the deal were not announced.

As part of the deal, Northwestern Mutual will be bringing on 1.5 million LearnVest users, plus 25,000 clients through LearnVest at Work, a year-old program where the company works directly with employers to provide financial planning services to employees. LearnVest also has 10,000 premium clients, and a total of 150 employees working out of New York and Arizona.

The client base at Northwestern Mutual dwarfs those numbers: There are about 4.2 million clients at the insurer, plus a field force of 16,000 reps.

“We want to bring together what we do best, best-in-class products and trusted financial advisers, and merge that with cutting-edge technology and the client digital experience that LearnVest has been focused on,” said Tim Schaefer, executive vice president of operations and technology at Northwestern Mutual.

The point of the deal isn't necessarily to tap a new demographic pool of clients, but to integrate LearnVest's technology and comprehensive planning capabilities. Though the acquisition makes LearnVest a subsidiary of the life insurer, the advice platform will still maintain its own brand identity and its business relationships.

Northwestern was an early investor in LearnVest, one of several companies that funded the digital company's early development.

“LearnVest has made it our mission to make unbiased financial planning affordable, accessible and delightful for all American households — a mission we will now continue with the support of Northwestern Mutual,” LearnVest CEO Alexa von Tobel said in a statement.


In an era where robo-advisers have sprung up to provide investors with an alternative to the traditional face-to-face meeting with an actual adviser, LearnVest's offering differs somewhat from that of its contemporaries. It has one-on-one personalized service that's facilitated by technology.

Bill Winterberg, an Atlanta-based certified financial planner and technology writer, noted that that business model faces some inherent difficulties.

“LearnVest always faced a head wind, and it was very challenging for them to scale that personal one-on-one financial planning,” he said, noting that it's simply a lot of work for planners to handle.

Nevertheless, Northwestern Mutual does have a retirement plan business, and it works in LearnVest's favor to get in with a buyer who already has plenty of employer relationships, Mr. Winterberg observed.

Mr. Schaefer noted that though NorthwesternMutual is excited about what LearnVest has accomplished with its employer-based program, there haven't been any determinations on what will happen with that business.

For now, the focus remains on LearnVest's ability to combine comprehensive advice using its technology. “We see that from an innovation standpoint, there's a real opportunity to bring together cutting-edge technology with that human touch,” Mr. Schaefer said.

“While some organizations may be picking between those two, we see a tremendous opportunity from an innovation standpoint to bring them together in a unique and powerful way,” he added.


Mr. Winterberg questioned whether LearnVest employees could find themselves in an awkward spot, now that their parent company is an insurer.

“The LearnVest company and brand originated as an objective source, not a conflicted source, of personal financial planning,” he said. “Conflicts aren't as bad as long as the employees know that the advice provider — LearnVest employees — have somewhat of a conflict if Northwestern Mutual products are part of the plan.”

Mr. Schaefer said that shouldn't be a concern for employees at LearnVest, as the company is expected to continue providing unbiased planning services as it has been. These planners will not become Northwestern Mutual reps.

“From their standpoint, being unbiased in their work is important to their business model,” he said. “If people get to the point where they need to introduce insurance or investments in the conversation, we're confident that our products can stand out on a list of choices,” Mr. Schaefer added. “[The deal] is not to make them Northwestern Mutual advisers or agents, but to allow them to operate their model.”

Ms. von Tobel launched LearnVest in 2009, initially starting the fledgling site as a financial information hub for women. The former Morgan Stanley trader then broadened her mission, searching for a way to make financial planning accessible by charging flat fees for guidance from CFPs.

In the years that followed, LearnVest scooped up millions of dollars in venture capital. Currently, new users pay a $299 one-time startup fee, plus $19 per month for ongoing support.


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