Why you should care

Because there’s a lot of stuff worth planning for that isn’t working.

Laura Varas has a few tips for anyone starting the search for sound advice on managing their money. Start with personality — yours, naturally, but don’t forget the personality of whomever, or whatever, you are turning to in order to get your financial life in shape. These days, amid a proliferation of new and old ways to manage money, there’s a personality out there waiting for you, much like that mythical soul mate, whether you are rich or poor, indebted or endowed, savvy or slow, wise or wondering. “One size never fits all,” says Varas, founder of Hearts & Wallets, a financial industry research and consulting firm. What she wants to know: “Does the brand resonate with my personality?”

And what more and more smart young people are discovering is that the trope about getting ready early for retirement — that one-size-fits-all personality around which most of the financial planning industry is built — just ain’t what it takes these days to seal the deal. What Varas found in a recent survey of more than 40 financial advice companies is a proliferation of new products that, instead of focusing on retirement, cottoned on to the brave new world that defines millennials as different from earlier generations: They tend to start life heavily indebted, they marry later and prepare to buy (what seem to be impossibly expensive) houses later. As for retirement, well, who assumes they’ll ever be able to punch out and stop working for good? Instead, 18 new entrant companies in the past 10 years focus not on the golden years, Varas found, but on “financial wellness and smart investment,” which recognizes that paying down debt, saving for a down payment on a house and building an emergency fund for millennials need to come before retirement.

The field is changing and growing so fast that it defies easy categories for choices.

The “personalities” of millennials have a few other key differences as well. They’re digital natives, accustomed to a welter of choice that they navigate on mobile devices, and they aren’t used to paying for, or at least not paying much for, stuff online. They’re also risk averse and distrust big institutions, according to a report from Corporate Insight, a financial consulting and research company. It’s this kind of intel that has trickled into a rapid and bewildering proliferation of tools that seem to slice up a person’s needs into almost any combination, at any price point, from simple financial calculators to elaborate planning and investment platforms that come with a sliding scale of (more expensive) human intervention. FlexScore, a free online tool that makes finance almost a game, features a ton of math and financial theory behind it. After you enter personal financial data and goals, it spits out a wellness score. Even so, tech like this may look very different soon enough. “The tools that are being created today are probably not the tools we’re going to use in five years,” says Jason Gordo, FlexScore’s founder and CEO.

The field is changing and growing so fast that it defies easy categories for choices, experts say. While FlexScore highlights financial weaknesses and steers customers to service providers (who pay referral fees), LearnVest, good for newbies, tries to provide a more traditional planning service by ramping up the technology component to save costs and lower fees. HelloWallet, meanwhile, operates inside of company retirement programs to help plan and gauge an employee’s financial wellness. Some tools make the approach through budgeting, like You Need a Budget or Mint; others, like Personal Capital, can track both budgets and investments. And then there are the planning tools aimed at professional advisers, including Jemstep, which was recently acquired by Invesco.

Of course, getting the most attention recently are the robo-advisers, automated investment platforms pioneered by market leaders Wealthfront and Betterment, but also now used by big investment houses like Schwab and Vanguard. But here too the offerings have grown only more diverse: WiseBanyan, which is free, or SigFig, which provides cheap access to an investment adviser. And, undoubtedly, the gold standard remains the personal financial adviser — an actual person paid by fee, commission or percent of assets managed.

Indeed, Brooke Salvini, a financial planner in Avila Beach, California, says she’s considering using a robo-adviser for some clients’ investments. But, she points out, this addresses only “the investment sliver” of a client’s needs. And Varas predicts the market will become even more fragmented as new products launch. “Millennials are forcing traditional firms to get more coherent about who they are there for,” she says. Which means that if you can’t find that perfect match today, maybe all you have to do is wait.

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