Is Grove's mix of old & new a financial planning breakthrough?

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Is Grove's mix of old & new a financial planning breakthrough?

When you need to make sure you’re on track to reach your financial goals, hiring a good financial planner can be a smart decision. Financial planners can help clarify your needs, set goals and make plans for your money. People who hire financial planners tend to save more for retirement. Yet only 32% of people get professional financial advice, according to research from Northwestern Mutual, a financial services organization.

The traditional financial planning model, which requires you to collect all your financial paperwork and meet with an adviser in person, might have been a roadblock for many. Personal financial planners can also be expensive and, depending on their billing methods, may earn commissions by recommending investments that aren’t in your best interest.

Launched in 2018, Grove provides a hybrid of online technology and traditional advice that can make financial planning more affordable and accessible. Here’s how it works and how to know if it’s right for you.

What Grove offers

Grove offers a way for consumers to receive personalized financial advice from certified financial planners online and over the phone. Grove’s advisers can provide the same guidance you’d receive from an in-person meeting with a financial planner, but at a potentially cheaper price point.

Grove also provides an online platform that analyzes your finances, assesses your goals and lifestyle and provides actionable advice for you to reach your milestones. You can log in to your Grove account at any time to gain insight into your money.

Grove’s hybrid of technology and old-fashioned financial advice can help people plan for their future in a way that may be more accessible than traditional financial planning.

How Grove works

1. Setting up your account

Before you get started with Grove, you have the option to speak with a Grove adviser and determine if the service is right for you. When you’re ready, you can create an account using your email address and credit card number. Grove will charge you a refundable $50 deposit when you sign up.

Within a few days of putting down your deposit, you will receive an invitation to join Grove. You can start filling out your financial profile immediately. Your profile is around 10 to 15 pages and includes basic demographic information, your family size, investment experience and income.

Next, you connect your accounts — including credit cards, bank accounts and investment accounts — to Grove’s platform so it can monitor balances and track your finances. If you don’t feel comfortable syncing your accounts with Grove, you have the option to manually key in balance information, which isn’t labor intensive but will require you to periodically log in and update your balances.

According to Grove, the setup process typically takes around 45 minutes.

Grove says security and data privacy are top priorities. Its platform has multilayer security protections and data is encrypted. You can learn more about its security policies here.

2. Meeting your adviser

After you set up your account, Grove will assign you an adviser based on skill set and availability. All advisors are CFPs and in-house employees of Grove. Within about a week, you will meet with your adviser over the phone for an hour-long introduction call and strategy session. The adviser will discuss your financial circumstances and goals, such as starting a family, investing for retirement, buying a home or saving up an emergency fund.

3. Receiving your financial plan

After the intro, your adviser will go offline for a few weeks to build your initial financial plan. When your plan is ready, you’ll schedule a two-hour call with the adviser to go over your financial report, including your current situation, goals and to-do items.

The plan will also be available in Grove’s website and app, which resembles a customized dashboard. It’s linked to your accounts and contains advice and recommendations you can access anytime. The platform is broken into four main sections:

  • Net worth: looks at your assets and liabilities and runs simulations on your projected net worth over the coming decades. This section will summarize if you’re on track to meet your financial goals. (Learn how a 10-year financial strategy can help you save more.)
  • Savings: breaks down your total savings, income and expenditures. This section provides advice on how much to save and where to save — for example, in a traditional savings account, health savings account, flexible spending account, 529 college savings plan or retirement account.
  • Investments: summarizes your investment accounts, making recommendations for investment allocations as your needs change or your accounts mature. Grove also offers a managed investment portfolio called Grove Invest.
  • Goals: aggregates your specific goals and indicates if you’re moving toward them successfully, along with recommendations on how to reach them.

Each section has personalized advice and action items to complete as you work toward your goals. There’s also an aggregated page with all your to-do items in one place, which you can check off your list as you complete them.

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4. Receiving ongoing advice

The financial report and recommendations provided through Grove and its advisers change based on your financial progress, account balances and as you complete items on your checklist. You will receive check-in calls every three months from your adviser, who can review your financial outlook and adjust your plan.

You can also schedule calls with advisers for on-demand advice. According to Grove, some of the items advisers can help with include:

  • Whether to rent or buy your home
  • How to combine your finances with your partner
  • How much insurance you need
  • How to prepare your finances for a child
  • How to save for your child’s education
  • How to invest your money
  • How to allocate your savings and pay off debt

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The cost

Grove charges a one-time setup fee of $560 to get your account up and running, then it charges $65 a month. If you sign up with Grove Invest, you’ll pay 0.25% of your managed assets over $100,000 and about $10 a month for accounts with $150,000 or more in assets. Your first $100,000 is free.

Because there are many types of financial advisers with different fee structures, it’s difficult to compare costs, but Grove can be cheaper than other options. With Grove Invest, advisers do not earn commissions, so you don’t need to worry about allocating your money toward products that benefit them more than they benefit you.

You have 100 days to request your money back after signing up with Grove. You can cancel at any time.

The advantages & disadvantages of Grove

Grove is a good fit for people who are actively saving and planning for the future, but not yet approaching retirement age. Ideally, they won’t have a ton of credit card debt and they are encountering greater financial complexity that may require guidance. The primary advantages of Grove are its combination of services, price and convenience:

  • Grove provides financial advice using a combination of personal services and technology. You get the human touch of a financial planner, but the online accessibility of its website and app.
  • The cost is straightforward and affordable.
  • You can schedule calls with your adviser and log into your account any time with a computer or smartphone.

Of course, there are some downsides to using Grove:

  • Grove is not a great fit for someone who is just starting out in their career, has extremely limited income or is approaching retirement.
  • You cannot meet with advisers in person.
  • If you’re not comfortable with using technology or you won’t be proactive when it comes to logging into your account and monitoring your finances, Grove won’t be as useful.

Bottom line

Grove offers an affordable and convenient option to people who may have previously felt professional financial advice was inaccessible. For a $560 setup fee and a monthly subscription costing less than $100, you can receive personalized financial advice and an online profile to track your progress.

But Grove’s advisers won’t meet with you in person, and most of the time you’ll use your Grove account to track progress on your own. Just like with any financial adviser, you’ll need to do the hard work of managing your money yourself.

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Image: Studio Firma