Financial Planning and Investing Analysis, Pt. 3

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Financial Planning & Investing Aggregators: TAM

Based on a survey of the estimated revenue of the top 21 financial planning and investing aggregators (more commonly termed "bank comparison" companies), we triangulate the current TAM at $2.21 billion. An explanation of the limits of the available data in the public domain and our methodology can be found below.

Methodology and Available Data Points

  • Our initial search found no available market reports which might provide data critical to calculating the TAM for financial planning & investing aggregators, nor any articles by fiance industry experts which estimate the total revenue.
  • We also find that "financial planning & investing aggregators" to be a term in wide use; sites such as Bankrate and NerdWallet are more commonly referred to as "bank comparison sites," while "financial aggregator" more commonly refers to an app or platform which enables the user to access their account information across multiple financial institutions in one place.
  • According to Gartner, comparison sites "own 34% and 25% of first-page search results for banking and lending, respectively."
  • Comparison site disclosure statements make it clear that a large portion of their revenue comes from the banks themselves, who register with the sites to boost their web traffic and gain new customers.
  • Comparison sites keep the details of their agreements with the banks "very close to the vest," according to Lierin Ehmke, Senior Digital Marketing Analyst at Comperemedia.
    • Ehmke adds that bigger banks tend to dominate comparison sites; for smaller financial institutions, "The best way to get an affiliate site presence on the cheap is to keep your finger on the pulse of newer affiliate sites."
    • Consequently, we infer that this market will be very fragmented, dynamic, and difficult to track for the foreseeable future.

Bank Comparison Companies

  • In addition to the companies listed in the research criteria (Bankrate, Consumers Advocate, Credit Karma, DoughRoller,, MagnifyMoney,, Money Crashers, Millennial Money, Money Under 30, NerdWallet, SmartAsset, Super Money, The Simple Dollar, and Wallet Hacks), The Points Guy, GOBankingRates, The Ascent, Wise Bread, and The Balance are "among the better-known financial comparison sites in the US."
  • LendingTree runs four more comparison sites: ValuePenguin, DepositAccounts, MagnifyMoney, and CompareCards.
  • FindABetterBank is operated by Novantas.


With such limited visibility, we pulled the estimated revenues of the known players in this sector from reputable repositories of corporate data. We have compiled these revenue estimates and our sources into a project spreadsheet for ease-of-review. Based on our survey of the top 21 companies in this sector, we estimate the current TAM at about $2.21 billion. This triangulation comes with a few caveats:

  • We lack visibility into's revenue; in our experience, this usually means that a company has a very small net income, but this is not a given.
  • While we have eliminated one company as being primarily based abroad, public records do not enable us to determine whether and what percentage of any company's revenue is generated outside of the US.
  • We do not know how many companies are operative in this sector, but based on our findings above, we believe that the number is growing. Consequently, this TAM should be considered the lower bound, though based on Wallet Hack, Magnify Money, and Wise Bread, we have no reason to believe that our triangulation would change by more than several million even if we had a more complete list.
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Financial Planning & Investing Aggregators: Buying and Shopping Habits

Consumers of financial planning and investment planning aggregators tend to plan very carefully for the future and will make saving and investing a part of their routine. While they are not always wealthy, they do their best with what they have and are more willing to invest in getting financial help. Below are some key details of consumer's buying and shopping habits.

General Buying and Shopping Habits of Americans

  • 99% of Americans do not use a financial advisor. Of these, 76% manage their own money, 15% rely on their spouse or partner, 4% rely on a parent, 1% relies on a financial advisor, whilst another 1% relies on someone else.
  • 70% of the U.S. economy depends on consumer spending and is divided into two categories, non-discretionary spending, (necessities such as medicine, housing and food) and discretionary spending (all non-essentials goods and services).
  • The top discretionary spending categories are apparel products and services at 0.5%, tobacco at 0.8%, entertainment equipment and services at 0.8%, alcohol at 0.9%, fees and admissions for movies, musical concerts and sports events at 1.3%, vacation lodging at 1/4%, hobbies, toys, pets and playground equipment at 1/4%, television, radio and sound equipment at 2%, gifts at 2.2%, food, not consumed at home at 4.4%.
  • The top non-discretionary spending categories are doctors and dentists at 3.0%, groceries at 8.6%, hospitals and nursing homes at 1.7%, rent or mortgage at 31.5% and utilities at 5.3%.

Buying and Shopping Habits of U.S. Consumers Who Use Financial Planning & Investing Aggregators

  • According to Business Insider, most people who use financial planning and investing aggregators tend to spend less than what they earn and live within their means.
  • Of those, they have little to no debt, are good "savers" who tend to keep their checking accounts at one institution and savings at another so they are not tempted to overspend and do not allow emotions to determine their financial decisions.
  • Business Insider also states those who use financial planning and investing aggregators aren't chasing name-brand items, they're more focused on values, deals, and quality items that will last.
  • Consumers who use financial planning and investing aggregators plan very carefully for the future will make saving and investing a part of their routine.
  • While they are not always wealthy, consumers do the best with what they have and are more willing to invest in getting financial help.
  • Those who manage their money aren't waiting for a raise from their employers or a "gift". They're using whatever money they have now.

Age & Gender

  • Younger Americans are burdened with more debt such as student loans and feel they do not have a lot of money to invest.
  • The Baby Boomer generation is the wealthiest of generations with $2.6 trillion in purchasing power. 64% of Baby Boomer women are expected to partake in the workforce by 2022.
  • The majority of the Millennial generation has less than $1,000 in their savings accounts and more than 65% of don’t have a credit card at all.
  • Millennials contemplate social responsibility and environmental friendliness when considering their purchases, demanding significant expectations with regard to shopping and investment dollars. Millennial value price over recommendations, product quality or brand reputation.
  • Millennials would rather spend invested money on an experience than an item they can "show off" making spending on experiences a priority among this generation.
  • Generation Xers outspend Millennials by 41% and Baby Boomers by 18%.
  • Women spend more time than men making economic decisions for their families as they account for nearly 70-80% of all consumer purchasing.

Research Strategy

To find the information above, our research team used data from statistical surveys, fact based research sites and articles from reputable online business and financial journals, annual reports and statements from company executives.
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Financial Planning & Investing Aggregators: Regulatory Concerns and Barriers

Financial planning companies looking to enter the market have many barriers to cross to be successful.

Continuous, Large Investments Fuel the Personal Finance Market

  • Entering the Personal Finance and Investment market requires a substantial amount of funding for personal finance business establishment, like the $69.9 billion USD that Human Interest raised.
  • A large portion of costs when starting a business will not be recovered, including compliance fees and marketing. Most, if not all, personal finance businesses struggle to make a profit without requiring Angel investment or acquisition.
  • The market continuously changes its focus, being currently focused on millennial investments, which means that new companies will have a hard time targeting adverts and finding its niche

Heavy Corporation Monopoly, Acquisitions

  • The personal finance market is filled with industry titans willing to snap up their competition such as Red Ventures LLC acquiring Bankrate in 2015 for $1.42 billion USD.
  • While some companies merge to provide better services, most look to simply eliminate other businesses in the market such as Kraken.
  • Maintaining a specific niche within the personal finance market is also very hard without acquisition, and Credit Karma's acquisition of Intuit for $7.1 billion USD to provide better services for Intuit customers is an excellent example.

Rigorous Compliance and Regulation

  • All personal finance and investment companies face a large amount of regulation at the federal level in the United States, including the Dodd-Frank act.
  • Another set of regulations laid out by the SEC in 2019 details a unified code of conduct for financial advisory firms to protect consumers, which increases the amount of compliances that must be followed.

Consumer to Brand Loyalty

  • Established brands, like TurboTax, have a consumer base that will remain loyal to the brand despite newcomers to the market.
  • A severe lack of privacy regulation with consumer data is another set back in the US market, and recent cybersecurity threats have made consumers warier of businesses (like personal finances) that require a heavy amount of personal information.

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Financial Planning & Investing Aggregators: Over- and Under-Served Markets

Although we could not find any hard data specifically stating that any particular segment was "over-served" in the financial planning and investing aggregator market, we were able to determine that Millennials appear to be the most-served market segment. Millennials are thrifty investors who have grown up with internet and mobile technology. Many are also freelance workers in the "gig economy" and therefore don't have access to traditional employer-sponsored retirement plans. These characteristics combined make them an ideal target market for financial aggregators and fintech companies. Baby Boomers, on the other hand, are an example of a market segment that is currently under-served by most financial planning aggregators, despite the generation's substantial wealth and growing tech-savvy.

Millennials: A Well-Served Market Segment

  • According to research from SEI Advisor Network, Millennials (Gen Y) "are skeptical about working with financial institutions" and rely on websites as their top financial resource (58%).
  • In comparison to older generations, Millennials are less likely to seek the advice of a personal financial advisor and more likely to invest via the internet/mobile technology or via robo advisors, such as Betterment.
  • Investing apps are known to target young, beginning investors, often through taxable brokerage accounts vs. tax-free or tax-deferred investment options, such as IRAs.
  • According to market research, the Millennial generation is typically the target market among fintech startups, primarily because of their receptiveness to new technologies.
  • According to Fast Company, the average user of the popular investment app, Robinhood, is only 28 years old. Experts suggest that the app has done well within the Millennial market due to its simplified trading interface; user-friendly experience; and uncluttered, award-winning design.
  • Level Money is another financial planning app that specifically targeted Millennials with their design by reducing choice and taking a minimalist design approach.
  • According to a 2015 T. Rowe Price study, the vast majority of Millennials (75%) claim to track their expenses carefully and are more likely to stick to a budget.
  • This thriftiness can also be seen in Millennials' investing habits. Rather than investing in trades, they are choosing to grow their wealth over time via low-risk interest-paying savings accounts and investing aggregators like Acorns.
  • Additionally, when Millennials do invest, they are more likely to avoid unnecessary or high fees than the Boomer generation.
  • The Millennial population is roughly 75 million, making them the largest living generation in the U.S. They also stand to inherit history's largest wealth transfer from their Baby Boomer parents. Considering this, they are a very large and potentially attractive market for financial aggregators.
  • Although the majority of Millennials have yet to amass much wealth to invest, some have done very well for themselves. A recent Nielsen report notes that Millennials "make up 14.7% of those with assets in excess of $2 million, just behind Boomers." These affluent Millennials tend to be those who have invested in themselves via startups and entrepreneurial opportunities.

Baby Boomers: An Under-Served Market Segment

  • According to reports, Baby Boomers represent "the greatest opportunity for mobile banking growth, at least in the short term."
  • Baby Boomers represent the largest generation in U.S. history and are the wealthiest consumer group to date, owning 78% of the country's financial assets.
  • According to industry experts, Baby Boomers have been under-served/ignored by many fintech companies, even though they make up 50% of consumer spending in America and generate a whopping $2.4 trillion in annual income.
  • Personal financial advisors were the top-named financial resource for the Baby Boomer generation, but they also relied on websites (45%) and traditional media (43%).
  • Although Baby Boomers may not be as comfortable with technology as the Millennial generation, studies indicate that older investors (55 years and up) are increasingly tech savvy.
  • Baby Boomers are an attractive market segment not only due to their wealth, but also because they are a wide cohort with several niches—including retirees, empty nesters and caregivers.
  • Boomers are also known for living very active lifestyles and choosing to work longer, which equates to earning and spending more money over time.
  • Although most Boomers don't currently use their smartphones for financial transactions, this is expected to change based on the upward trend in mobile banking usage among Boomers and older generations—which has tripled since 2011.
  • Additionally, studies show that only 24% of Baby Boomers feel they have enough in retirement savings, which means they should still be considered an attractive market for financial aggregators.
  • United Income—a retirement platform in beta stages as of 2017—is one example of a fintech company specifically targeting the Baby Boomer segment, particularly Boomers in the middle-to-upper income range. It offers a unique "retirement paycheck" feature to help retirees manage day-to-day expenses.
  • According to experts, aggregators can cater to the Boomer generation by offering technology that protects them from fraud and helps retired users manage their retirement savings.
  • Targeting the Boomer segment has its challenges, particularly with marketing and technology, but the answer lies in "improving access and education of user-friendly digital banking products to these customers."

Research Strategy

Despite an exhaustive search of industry sources, journals and news articles, we found very little quantitative data was available regarding under- or over-served markets for financial planning and investing aggregators. However, we were able to find multiple industry reports with qualitative data that identified Millennials as a key target market for financial aggregators and fintech companies, as well as several that identified Baby Boomers as a market that has largely been ignored.

From Part 02
  • "The national poll, conducted for CNBC and Acorns by SurveyMonkey Oct. 21–25, surveyed 2,776 adults and had a margin of error of plus or minus 3 percentage points."
  • "Consumer spending consistently accounts for about 70% of the U.S. economy."
  • "The survey asked 2,000 adults about their budgeting habits and weekly spending. Topping the list of categories where respondents overspend is online shopping, followed by grocery shopping and subscription services."
  • "Javelin recently shared invaluable insights about consumer spending habits across three channels: in-store, online and mobile. It also provided recommendations for issuers and merchants on improving the frequency and value of payment methods used by consumers. "
  • "Baby boomers hold $2.6 trillion in buying power. They’re credited as one of the wealthiest generations to date and are still economically powerful despite their old age. Boomers have had more time to build their wealth in comparison to other generations while some are still in the workforce and making more money. "
  • "When shopping, Millennials focus on discounts. They value price over recommendations, the brand’s reputation, and even product quality. They follow brands online just for discount opportunities. "
  • "Gen Xers have the highest post-tax incomes and spend the most. Millennials, Gen Xers and baby boomers had average post-tax incomes of $58,628, $88,794 and $67,950, respectively, in 2018. Of their post-tax income, millennials spent an average of $52,874 a year, while Gen Xers spent $74,683 and baby boomers spent $63,325 a year. "
  • "Women, on the daily, spend more time than men making economic decisions for their families -- from consumer goods to services. Women hold crucial purchasing power. In fact, Women drive 70-80 percent of all consumer purchasing, through a combination of their buying power and influence. "
  • "No matter whether their goals were short-term like an emergency fund, a car, or a down payment for a house; or longer-term such as retirement, my most successful wealth-builders were very good savers and very careful spenders."
  • "People who are good with money buy the financial products and services, and buy the team that's going to help them to gain further wealth," says Khalfani-Cox."