One of the longest established personal finance managers (PFM), Wesabe, is shutting down.
In an entry on the Wesabe blog, CEO Marc Hedland explained the reasons for their closure after 5 years:
In recent months Wesabe has been operating on a shoestring budget, with support from some of the developers and operations people who made up our core team. While the site has remained online and we continue to hear from people who find it helpful, we have not been able to provide the support people need to use it for something so central as financial management. I’ve felt especially terrible that some members have a good initial experience but then hit a problem, often after investing many hours, and aren’t able to get help with it. That’s obviously a bad experience, and not what we want to offer. Also, because Wesabe stores such highly sensitive data, continuing to operate the service with shoestring operations and security staff is not acceptable, and we do not want to continue accepting new accounts if we cannot guarantee the security level we believe our service requires.
Essentially, they’re admitting that they can’t afford to continue the service. I don’t recall quite how Wesabe worked, having only looked at it a few times, but it would appear that they’ve struggled to monetise the traffic they were getting, and eventually found they were losing customers to the likes of Mint.
A couple of years back Wesabe signed a deal to provide a whitelabelled version of their tools to The Telegraph newspaper. Unsurprisingly, that site is now unavailable, but I’m not sure whether that’s because of this recent news or whether it was knocked on the head before now.
Wesabe is due to close all accounts and delete all data at the end of July, during which time there’s likely to be a clamour from the remaining PFMs to get Wesabe users on board. Wesabe are going to be posting more options for exporting customer data in the next few days.
This is the second high-profile PFM closure in the last few months – Kublax ran out of money earlier this year.
Whilst I believe that PFMs are here to stay, they do appear to be difficult to make any money from. They can also take a fair bit of capital to setup and run because of the security implications.
Update: NetBanker has some more information on Wesabe’s closure, showing the decline in users on Wesabe (still 40,000 visits per month) and perhaps most interestingly, Wesabe are planning on releasing some of their code for other developers to use.
The Simple Dollar also has some Wesabe alternatives, for those who enjoy managing their finances in a more manual way.
- Royal London Money Manager Is Closing (September 1, 2016)
- RetireEasy: Pension Dashboard & Retirement Planning Tool (October 12, 2016)
- Gocompare.com Launches Enhanced Current Account Comparison Service (March 26, 2015)
- Money Dashboard Mortgage Calculator Launched (September 20, 2016)
- Ernest: Latest Chatbot To Bring Artificial Intelligence To Your Bank Account (January 25, 2017)