Three years after Northwestern Mutual Life Insurance Co. acquired the online financial planning company LearnVest Inc., the Milwaukee-based insurer is shutting it down.
Northwestern Mutual said it would discontinue LearnVest to consumers and businesses, a move taken in connection with what the company called the “next step” in the integration of the insurer and its online subsidiary.
A letter emailed to customers says LearnVest will stop operating its online tools and financial planning on June 5.
The purchase of LearnVest in 2015 for an undisclosed price — some reports estimated it at $250 million — was a rare acquisition for Northwestern Mutual, but it gave the company a position in the “robo-adviser” market in which technology firms offer inexpensive online financial planning tools for consumers.
While the company kept LearnVest going after the acquisition, it noted about a year after the purchase that Northwestern Mutual was using the technology and employee know-how of LearnVest to create a new online platform that would help insurance policy owners craft and monitor — with advice from their Northwestern financial rep — a personal comprehensive financial plan.
Northwestern Mutual spokeswoman Betsy Hoylman said more consumers today want an “end-to-end experience” in which an adviser creates a personalized financial plan and has the ability to take action on it.
“With LearnVest you would receive a plan, you would talk with you planner, but you were on your own to implement,” she said.
In a statement, the company said the end of LearnVest as a robo-adviser “will allow us to focus resources and leverage Northwestern Mutual’s established nationwide network of financial advisers, using the cutting-edge planning platform and digital tools that we’ve created together.”
Under John Schlifske, chairman and chief executive officer, Northwestern Mutual has been stressing increasing the company’s role as a financial advisory firm and not just as a life insurer. He also has pushed for a digital transformation of the company.
When LearnVest, which started in 2009, was acquired by Northwestern Mutual, its service and brand name were kept intact by CEO and founder, Alexa von Tobel, who then became a Northwestern Mutual executive.
Last year, von Tobel was named chief digital officer of Northwestern Mutual, a position in which von Tobel is to help accelerate Northwestern Mutual's digital transformation.
Von Tobel, based in New York with a Northwestern Mutual technology team, expects to revive LearnVest as a financial education site — but not a financial advisory tool — this year, Hoylman said.
In Northwestern Mutual’s statement on the matter, the company said, “True to its original mission, Learnvest.com will relaunch later this year as a fresh, digital resource focused on educating consumers on how to meet their financial goals.”
Von Tobel, in an email to customers last week, echoed that sentiment, saying LearnVest is “at a turning point.” She advised LearnVest customers to make sure to download personal documents, including their financial plan, before 5 p.m. on June 5.
Asked whether LearnVest customers would be solicited to become Northwestern Mutual clients, Hoylman said customers “won’t be necessarily transferred to Northwestern Mutual because the business models are so different.”
While LearnVest is closing down, Hoylman said the "the digital part (of Northwestern Mutual) is going very, very strong." She said the New York office has tripled in size since the LearnVest acquisition.
"Hiring is very robust, not only in Milwaukee but also in New York," she said.
"Financial planners (from LearnVest), who actually work out of Arizona, the type of work they've been doing up till now will be going away. But they have been offered positions with Northwestern Mutual that put their skills, put their talents to use."
Hoylman said: "Our joint teams will continue working across campuses in Milwaukee, Franklin and New York to help clients by continuing to work on our digital platform, which is central to the financial planning experience we are re-imagining."