Rachel Strate is an analyst for a local VC firm that I know and has posted this excellent summary of online financial managers.

As I contemplate switching offerings I noticed that the product characteristics that are a necessity for me, include:

• User Interface - I want an user interface that is intuitive. Sure there is a learning curve with any new tool, but I am hoping for something I can figure out relatively quickly that allows me to slice and dice my data (for example I really like being able to see spending over custom time ranges, not just month-to-month).
• Bank Access - When I first checked out Mint last year I couldn’t get access to a regional bank I use. That has now changed, but was obviously a major no when I first looked at the company.
• Security – Many companies in this realm are start-ups, which makes me nervous for two reason. First, have they accurately approached security, encryption and storage? Second, will they still be in business in a year or two and if not, where will my data end up?
• Reliability – These companies are dealing with my financials and must be reliable. What is the point of using a PFM solution if it doesn’t pull all my transactions?
• Live-Chat Customer Service - Customer service is a necessity and live chat is just my personal preference. I personally like "on-demand" help, if needed.

Product characteristics I don’t care about:

• Community - Does the whole web experience need to be social? Many of these companies tout the community aspect and I can see why this might be a draw to some people, but it just isn’t a priority for me to talk to strangers concerning my finances. Aggregation of articles and sites, sure. Random strangers giving me advice, not so important.

 

Players in this space include the following:

Company: Mint
Software / Online: Online
User Interface: Very good
Bank Access: 6,500 banks
Budget Capabilities: Yes, but as a goal section rather than priority
Reporting: Yes
Investment Monitoring: Yes, but still in private beta
Community: No
Security: Verisign, HackerSafe, Truste, plus they do not record the user’s actual name, only email address. Mint provides a whole video of their CEO speaking solely to security plus a scroll down page with each point thoroughly discussed.
Reliabilty: Unkown as I have had limited use
Customer Service: Email only.
Comments: This company has been hyped, but for some reason has never quite worked for me the four times I have given it a shot. Today was the first time I could successful add accounts, only having problems with one regional bank that has image verification security. I figured I would try contacting customer support with the issue. No live chat, but an email function that automatically responded back to me with a “help is on the way” kind of thing (nice). The email said they would contact me concerning the issue within 24 – 48 hours, yet over-promised and under-delivered as I have yet to hear back after 72 hours. One interesting feature is the user can input in his/her zipcode and get a benchmark of what others in the area spend in each category.
Price: Free

Company: mVelopes
Software / Online: Online
User Interface: Very good. The layout structure works really well for me but the company could make it look a little more professional.
Bank Access: 14,459 banks
Budget Capabilities: Yes, with a focus on the user sticking to a budget. The user sets asides the money in envelopes and when it is gone it is gone, unless the user pulls money from other envelopes.
Reporting: Yes, but I wish it had more features.
Investment Monitoring: No
Community: Yes, but quite separate from the main user face, which is nice
Security: Verisign, BBBOnline Reliability Program, Security Metrics Certified. The company provides a whole page discussing SSL, Session Management, Firewall Protection, etc.
Reliability: For the first couple years the product was fantastic. Within the past 3 – 4 months it has been have some issues.
Customer Service: A user can call, email or use live chat.
Comments: The company has been having some technical difficulties, specifically with connectivity (as mentioned earlier in my post). I really like the structure of the user interface as it makes the user think in terms of budgeting and staying within that budget. I wish their reporting capabilities where a little bit better and offered custom time frames. I do like supporting a local team, but their customer service has been hard to work with and would be the breaking point on why I switched services.
Price: ~$5 – 10 depending on the years of commitment.

Company: Wesabe
Software / Online: Online
User Interface: Ok. A downloadable toolbar or software is necessary to add banks. I have given this company a try on two occasions and this step has temporarily stalled me from continuing to the next phases both times.
Bank Access: Unsure on exact number, but both my regional banks were listed.
Budget Capabilities: Yes, in a goal tab. I wish they had budgeting set up as a priority rather than an afterthought.
Reporting: Yes
Investment Monitoring: No
Community: Yes, but too much. The community is mixed in with the interface and I want my financials to seem private.
Security: The company implements “industry-standard encryption” and strips each user account of personal identifiers.
Reliability: I have not used enough to comment in this area
Customer Service: Email only.
Comments: When adding a bank account it re-directs to the bank page and then back to the Wesabe site. I think I read this had something to do with keeping the passwords straight between the banks and community. I don’t thoroughly understand the technicalities of why they do this, but I don’t like that I feel as if I am leaving the main Wesabe site.
Price: Free

Company: Buxfer
Software / Online: Online
User Interface: Very Good
Bank Access: Unsure on number of banks, but both my regional banks were listed.
Budget Capabilities: Yes, but once again an after thought, not a priority
Reporting: Yes
Investment Monitoring: No
Security: A little hard to track down on the site. They state that they follow “industry standard encryption techniques and practices”, plus comment that passwords are encrypted prior to storage, transferred through SSL and decrypted only during authentication.
Reliability: I have not used enough to comment.
Customer Service: Email only.
Community: Unsure. It says you can add groups, but it appears that it adds people you know through email.
Comments: None.
Price: Free

Company: Intuit Quiken for Mac (I am a Mac user so this would be the one of interest to me)
Software / Online: Both
User Interface: Very good but perhaps a little too technical that it isn’t completely user friendly
Budget Capabilities: Yes
Reporting: Yes, plus allowing custom date ranges
Investment Monitoring: Yes
Community: Yes
Bank Access: Unsure on actual number, but both my regional banks were listed.
Customer Service: A user can call, request a call back, email, chat, or check out their social media sites of Facebook, Twitter and Youtube.
Comments: This is definitely the most professional option for personal finance that also includes reminders for bills and a tax tracking area. I am unsure if it autosyncs transactions or if the user must actually download into the software.
Price: $69 for software ($53 with very accessible coupons) plus $2.99 for online version

After looking at this breakdown, it seems that many of the web players focus on limited functionality but with a free price tag. When it comes to my finances, I would happily pay if I felt the solution was helping me to save money, assisted in thoroughly tracking my finances and still allowed me access to customer service when needed. Looking at the competitors I still lean towards mVelopes, of which my subscription expires in January and at which time I will re-assess. I am truly hoping that their technical issues are resolved at that point, otherwise, I might have to make the move towards Intuit.

 

Rachels thoughts on mEnvelopes:

I have been actively managing my finances (i.e. budgeting, investing, etc.) for the past 4 or 5 years and have noticed that the process is substantially easier through the deployment of a personal financial management solution.

For the past 2.5 years I have been using the Utah-based start-up mVelopes for my financial management needs. I have really enjoyed the product, finding the user interface intuitive and complementary of my financial management strategy of budgeting first and spending only the allocated capital. Because mVelopes allowed me to support a local company, I truly tried to be an outstanding customer answering every survey sent my way and suggesting the product to numerous friends, a handful of which joined the service. However, in the last couple months the service has become patchy, ridden with connectivity and transaction issues. I am hoping that this is due to an increase in the user base, resulting in business growing pains. Yet, at the same time I can only wait so long for the engineers to resolve these problems as I am a paying customer .

The worst part about the mVelopes issues is the naïve attitude of the customer service. I have had to contact customer service at least 6 times in the past two months, resulting in the customer service agents tip-toe-ing around a real solution to the problem. It seems that they offer a temporary fix, but never offer me an end date for the actual solution nor compensate me for my loss of time and troubles. The connectivity issue is just a pain, but the missing transactions is disconcerting. For instance, once I noticed that I was missing a transaction and so contacted customer support to learn that in reality I was missing 28 transactions over the past 2 months that had hit their servers but weren’t being pushed through to my user interface. No apology, just a simple "we don’t do refunds due to our terms and services."