How Financial Management Tools Can Better Serve Consumers


Technology has created a rapid evolution of the personal financial management (PFM) industry.

Financial advice and education once delivered through in-person visits to a financial advisor are now just a click away through online portals and apps. And while convenient access to financial advice has become ubiquitous, there remains a disconnect between what some of the most popular PFM solutions claim as benefits and what consumers desire. In particular, the PFM industry needs to realize that different people need different things when it comes to achieving financial well-being – there is no one-size-fits-all solution.

Here are some considerations for the next generation of PFM and how providers can better tailor solutions based on individual needs. But first, how do we define financial well-being?

Financial well-being: meeting people where they are

At its most basic, individual financial well-being is the state of financial well-being achieved and maintained when people know what they have, know where they are going, and feel good about it. It is an intentional practice, a way of life — not an end state or a destination to be reached.

Financial wellness can reduce concerns about financial need and improve mental and physical well-being. Financial health has the potential to reduce stress in other areas of life, such as family, relationships, and career planning. Additionally, increased financial well-being creates the potential for greater freedom to find work-life harmony that allows you to focus on what matters.

But it’s important to recognize that not everyone starts at the same “starting line” in this marathon to find financial well-being. The gender pay gap is still widespread; women earn less than men and it is believed that this take 42 extra working days for women to earn what men earned in 2020.

There is also a gender gap in financial literacy: data shows that men understand money better than women. The way we teach and empower women to succeed in today’s world is at the root of this financial literacy gap.

Additionally, the persistent racial wealth gap continues, with little progress being made to close the gap. Research shows that closing the racial wealth gap is key to addressing large-scale inequality. We also know that diversified wealth is better for the economy.

People’s life stages and values ​​also cause them to think differently about money. New notions of ownership – where access to assets is more important than ownership itself – mean that some people prioritize cash flow over wealth creation through asset appreciation .

The advances of traditionally underrepresented groups are also creating new demands in the financial wellness industry. Although working women still earn less than men on average, they have made progress over time. Women’s economic empowerment creates new financial opportunities and new financial needs for women. Five types of women’s economic empowerment have emerged: increased participation in the labor market, increased income opportunities, increased financial and digital inclusion, changed family structure, and a greater role in purchasing decisions.

Seniors, a changing demographic, are growing faster than the rest of the population and have unique needs such as preserving wealth and maintaining a high quality of life. And at the same time, most consumers – regardless of age or gender – are increasingly concerned about making environmentally responsible financial decisions. Sustainability is a priority for everyone, from large corporations to individual consumers.

The bottom line is this: changing demographics, consumer wants and needs mean that PFM solutions must evolve to meet people where they are and create flexible, responsive financial wellness tools. specific to each individual.

How can personal financial management tools measure up?

Today, GFP solutions are announcing their ability to help consumers:

  • Better understand money
  • Organize your spending and savings well
  • Set clear financial goals
  • Learn how to invest and create wealth

These are important concepts, and they still need to be integrated into any PFM tool. However, more can be done. Here are five things I think PFM tools need to start doing to ensure they best serve consumers and subsequently improve the overall financial health and literacy of individuals.

  1. Tools rather than products – PFM should focus exclusively on financial education, wellness and tools. This means not featuring or linking to products of any kind. By focusing on financial concepts rather than sales tactics, GFPs can maintain impartiality and build trust.
  2. Help people embrace their passions – Today’s consumer is not two-dimensional – they want financial advice, but they also want companies to help them pursue their goal. GFPs should mature beyond focusing solely on financial goals to helping individuals embrace their passions and live a financial life consistent with their values. This could mean offering eco-friendly investments to a consumer’s 401k portfolio; it could also be as simple as helping advisors find sustainable companies to buy from.
  3. Personalization is key – GFPs should provide curated and personalized financial education tailored to an individual’s changing circumstances and interests. It involves using behavioral psychology and data to present personalized, unbiased, and timely information and suggestions.
  4. Help consumers gain confidence – An effective PFM app will provide people with tools to foster a healthy relationship with their money and instilling competence and confidence in one’s ability to handle it. This includes helping users identify and unlearn harmful myths about financial relationships.
  5. Safety reigns supreme – Financial data should be kept safe – and consumers should also know that they can be assured that their data is protected. It’s a no-brainer these days, but GFPs need to use the best of cybersecurity to protect data.

A future full of possibilities

PFM tools are an essential part of financial well-being. The more these apps are equipped, the more likely consumers will be to access them and potentially improve their financial health and knowledge.

Technology has accelerated the ability of PFM tools to deliver effective, real-time advice. But there is an opportunity to do even more.

Personalized PFM capabilities that meet consumers’ wants, needs, and goals will represent the next generation of financial health and wellness.


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