What Do Consumers Really Want From Financial Planning?

Victor Lombardi
5 min readSep 8, 2016
The Charging Bull of Wall Street Bull by Arturo Di Modica. Photo by Sam Valadi.

In 2011 I was working on Wall Street. Every day for two months I would walk past the Occupy Wall Street protestors camped out in Zuccotti Park. And every day I passed them I wondered, “What am I doing to help the 99% improve their financial lives?” I’m not in the 1%, but I was in pretty good shape: I had recently married, had two kids, bought a house and a car, and put together enough of a financial plan to feel that my family and I were secure. But I’m fortunate enough to have a father who taught me the basics of personal finance, years of working in financial services on Wall Street, the ability to hire a financial advisor, and a wife who’s a great financial partner. There are millions of Americans who don’t have the advantages that I have.

Over the following years I talked with others in the software and finance industries about what we might create to help people lead healthier financial lives. One conclusion we reached is that the wealthy already have the solution: financial advisors, tax advisors, and legal advisors each with their own expert software. Sometimes all of these advisors are bundled into one place called a family office. A portion of what the family office provides, such as the financial plan, could be replaced with algorithms and a friendly interface. You can see the beginnings of this in the algorithm-powered investment services such as Betterment and Wealthfront. But investing is only one aspect of our financial lives.

Society of Grownups is a nascent online+physical financial planning service from Mass Mutual.

I started by creating several simple prototypes. When I tested them to our target audience (mostly young couples and families) they loved the idea. So I worked with two colleagues for several months to build a service called Nickel that we described as “TurboTax for financial planning”. Nickel asks you some questions and then generates a custom financial plan for you. The plan encompasses savings, investments, insurance, and estate planning. You could spend $2,000 to have a financial advisor customer create a plan for you. We planned to give it away for free.

Our prototype of the Nickel personal financial planning service.

Remember when we needed someone else to book a flight for us, or buy a stock? We think the same disintermediation will happen in financial planning too, eventually. Financial advisors already have fully functioning planning software such as eMoney Advisor and MoneyGuidePro. But no one has yet made a version easy enough for consumers. Think of the potential if we all had access to sophisticated, easy to understand financial advice. For free.

LifeTrek from Allstate featured customer-centric questions but always pushed products rather than solve problems.

The current version of Nickel is “x8” because it’s the eighth prototype we built. With each successive prototype we tried something new, tested it with people, and learned more about how moving the financial planning process online could work. Here’s a few things we learned:

  • This is a real pain in people’s lives. The target audience immediately understands what this does and why it’s valuable. 30% of our test participants asked, “Can I have this now?” Easy financial planning isn’t a vitamin, it’s a painkiller.
  • Some people want to learn, others want a tool. About 90% of people we tested acknowledged they didn’t know much about the topic and were eager to learn. About 10% had existing prejudices (e.g. “Disability insurance is a scam”) and wanted a tool to help them execute on their ideas.
  • There’s a chasm to be crossed. Whether someone will use a service like this depends on the usual psychographic factors. For example, early adopters comfortable with using startup services dove right in and loved empowering themselves. Late adopters who are uncomfortable with technology wouldn’t use this until it’s a household name, and even then probably wouldn’t pay for it unless it includes human interaction. But online financial planning could become the new normal in a decade, given how long other online services like bill payment took to spread.
  • The great is the enemy of the good. When we followed all the accepted rules and principles of traditional financial planning we stumbled in two ways. One, people were asked to do too much work compared to their expectations of easy-to-use online services. Two, an algorithm could help people meet sound financial goals and invest wisely but leave no money left over for fun. Any solution needs to balance financial planning and the simple pleasures of life well lived. Don’t take away people’s lattes.
  • The financial services companies are key to making this all work. If you use a service like Betterment or Wealthfront to invest, they seamlessly connect to investment managers such as Vanguard. But you can’t buy and manage life insurance or banking products that way because those connections (APIs) don’t exist. That’s the single biggest roadblock keeping the insurance and planning industries from capitalizing on this opportunity.
  • Managing is as hard as planning. As consumers’ lives change their policies, coverages, savings, and wills should change accordingly.
  • This is not a technology problem. None of the technology needed is new. Sure, it could benefit from enhancements such as machine learning, but mostly we need to connect the financial systems that already exist with time-honored financial planning rules-of-thumb.
  • No one knows what this should look like. We used a TurboTax-like questionaire for Nickel and it worked, but that’s not necessary the best way. Maybe Duolingo is a better model, or Kayak, or something else. More experimentation is needed. There’s not even a standard format for the financial plan itself. The whole landscape is ripe for invention.
  • Smart companies understand the potential. Both large companies and startups are working on the problem, albeit to a limited extent. SmartAsset and NerdWallet are building product-based algorithms that could be combined into planning algorithms. LearnVest started using human advisors but is now hiring algorithm developers. I’ve talked to PolicyGenius and they see the potential to not only create plans but also customize insurance products in new ways. Industry giants such as Allstate and Mass Mutual are running live experiments.

In the end we learned that people do need better, less expensive financial planning, but they want a lot more. They want insurance policies that are easy to buy as a washing machine. They are willing to do some research, but they want to complete the entire transaction online. They want contracts they can actually read and understand. They want an easy way to remember what they already have and then update it all when their life changes.

Americans spend $600 billion per year on life insurance and $29 billion on disability insurance. And that’s just insurance. Just think how much bigger the pie will become when financial service companies pursue a customer-centric approach. And by doing so they’ll help the 99% avoid another financial collapse.



Victor Lombardi

Design director at Capital One; author of the book Why We Fail http://bit.ly/WhyWeFailBook ; founded IA Institute & Overlap; taught at Parsons, Pratt, Rutgers