Morningstar to Acquire HelloWallet

Acquisition to meld HelloWallet’s financial wellness expertise with Morningstar’s independent, research-based retirement advice

Morningstar banners (Photo: AP) Morningstar banners (Photo: AP)

Morningstar announced Thursday that it has entered into a definitive agreement to acquire HelloWallet Holdings Inc., a provider of online financial wellness, for $52.5 million, including the stake it already owns.

Once the transaction is completed, which Morningstar said will occur in the coming days, Morningstar will pay $39 million; it currently has a minority stake in the company valued at $13.5 million.

Morningstar, through its advisory subsidiaries, is the largest provider of managed retirement accounts by participants served, with almost 1 million individuals enrolled. The acquisition will bring together HelloWallet’s comprehensive financial wellness expertise with Morningstar’s independent, research-based retirement advice to create a holistic retirement savings and advice offering.

“There is a strong mission and cultural alignment between Morningstar and HelloWallet,” said Brock Johnson, head of retirement solutions for Morningstar, in a statement. “Both firms are independent, entrepreneurial, and grounded in academic research. We want to bring together HelloWallet’s expertise in behavioral and consumer research and analytics with Morningstar’s investment management capabilities to create the first holistic solution for the retirement market.”

Dr. Matt Fellowes, a consumer finance expert and former Brookings Institution scholar who founded Washington-based HelloWallet in 2009, will maintain his leadership role in the company, which has about 50 employees.

In January 2012, Morningstar became a HelloWallet investor with $6.75 million in Series B funding.

HelloWallet combines behavioral economics and the psychology of decision-making with sophisticated technology to provide personalized, unbiased financial guidance to more than 1 million U.S. workers and their families through their employer benefit plans.

“HelloWallet’s done a tremendous job — its unique approach to financial wellness has changed the way employers view benefits programs and the way employees manage their daily finances,” Johnson said. “Working together, HelloWallet and Morningstar have an opportunity to significantly improve the financial and retirement outcomes of workers.”

He added that HelloWallet’s capabilities could provide value for many of Morningstar’s clients, including advisors and asset managers.

“Holistic advice is becoming a ‘must have’ capability, as employers increasingly look for integrated solutions across their retirement and health care programs,” said Fellowes, in the statement. “Today’s routine financial choices are directly linked to tomorrow’s long-term retirement, health and savings decisions. We want to help people make the best decisions with their paychecks so they can actually have money to invest for their futures.”

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