Some news from SmartHippo

We covered SmartHippo back during Finovate Startup, but wanted to update our readers on some exciting developments at their firm. Please see the attached press releases for more info.

SmartHippo names former LendingTree GM Lori Collins CEO
Previously grew revenues from $7 million to half a billion over seven years
SAN FRANCISCO, CA AND MONTREAL, CANADA -- October 14, 2009 -- SmartHippo,
the first web site that let consumers use the power of the community to shop for
financial products, announced today it has named Lori Collins as its new CEO.
“Weʼre very excited by Loriʼs unique experience in both the web and finance sectors,”
said Founder George Favvas, who will continue his involvement in the company as VP
Corporate Strategy. “Iʼm confident that with Lori at the helm we are well positioned for
our next phase of revenue growth.”
As General Manager of the LendingTree Exchange, Collins was responsible for sales,
relationship management, and product management for the LendingTree lender
network. She was part of the executive team which increased revenues from $7 million
to $476 million over seven years.
“SmartHippo has a very compelling business model,” Collins said. “Community-driven
product comparisons have become the norm in other industries, and Iʼm excited to be a
part of the company that is bringing these innovations to the financial space.”
Unlike intermediary web sites which match consumers with lenders based on business
relationships, SmartHippo is an open, transparent marketplace where consumers help
each other find the best financial products. They can ask questions, compare rates and
share reviews and experiences with other consumers and make a more informed
decision. Lenders and brokers participate by answering questions and posting rates,
and consumer feedback keeps them in check.
In another announcement today, SmartHippo announced it is expanding into the
Spanish market with the launch of HipoListo.es in partnership with Financialred
Network.

About SmartHippo
SmartHippo.com is the first-ever website that uses the power of community to help
consumers find the best mortgage rates and save money. SmartHippo allows any
individual to post information and feedback on the rate they received, and to compare
rates with other members of the community with similar profiles. Members of
SmartHippo can see real rates reported by real consumers, and sort through banks
based on feedback posted by other members of the community. The company is
privately held with offices in San Francisco and Montreal. www.smarthippo.com
Contact:
George Favvas
Founder and VP Corporate Strategy
george (at) smarthippo.com
(514) 242-5730
Media advisory: Lori Collins will be delivering the closing keynote at Startup Camp
Montreal tomorrow, October 15th. The event takes place at the Society for Arts and
Technology, 1195 Saint-Laurent boulevard, Montreal from 6pm to 11pm. Admission is
free. For info see: http://www.startupcampmontreal5.wikidot.com

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SmartHippo expands into Spain with launch of HipoListo.es
Joint venture with Financialred Networks poised to become leading player in market
SAN FRANCISCO, CA and MADRID, SPAIN -- October 14, 2009 -- SmartHippo, the
first web site that let consumers use the power of the community to shop for financial
products, announced today a strategic partnership with Financialred Networks which will
see the launch of HipoListo.es in the Spanish market.
Under the terms of the agreement, Financialred has acquired an exclusive license to
market the SmartHippo brand and technology platform in Spain.
“The web finance space is in its infancy in Spain and we believe we have an opportunity
to rapidly establish HipoListo as the dominant player in a market of 50 million
consumers” said Jesus Perez, Chief Strategy Officer of FinancialRed. “By leveraging
the SmartHippo platform we were able to significantly reduce our time to market.”
As part of the partnership, SmartHippo will manage the software platform while
Financialred focuses on localization and sales and marketing. As of todayʼs launch,
HipoListo.es mortgage vertical, with other verticals planned for early 2010, he added.
“Weʼre thrilled to be a partner in bringing the first social financial comparison shopping
engine to Spain,” said Lori Collins, CEO of SmartHippo. “Our partnership with
Financialred signifies our commitment to work with and drive profitability to media
companies with existing user bases.”
Separately today, SmartHippo announced that Collins, formerly GM at LendingTree, has
joined the company as its new CEO, taking over from George Favvas, who will remain
onboard as Founder and VP Corporate Strategy.

About SmartHippo
SmartHippo.com is the first-ever website that uses the power of community to help
consumers find the best mortgage rates and save money. SmartHippo allows any
individual to post information and feedback on the rate they received, and to compare
rates with other members of the community with similar profiles. Members of
SmartHippo can see real rates reported by real consumers, and sort through banks
based on feedback posted by other members of the community. The company is
privately held with offices in San Francisco and Montreal. www.smarthippo.com

Review of SimpliFi: Virtual Financial Advisor

We wrote in the Winter about SimpliFi—a winner of the “best of show” award at Finovate Startup. SimpliFi is in private Beta right now and available to test drive so I took it for a spin this afternoon.

SimpliFi is a financial health assessment tool and bills itself as a “virtual investment advisor.” SimpliFi is even registered with the SEC as a Registered Investment Advisor.

The Web site is well organized, easy to use and clear. It doesn’t confuse the reader with mumbo-jumbo and I think would be accessible for individuals with any level of financial knowledge.

“Sophie,” the “virtual advisor” gives you the impression of a consultation, rather than working with a calculator, but ultimately to me, the results felt far more like a calculator.

After entering annual incomes for each member of our family and annual retirement account amounts, I was surprised to see that “Sophie” calculated the take-home-pay and taxes, and then returned a monthly take-home amount which was way off base. The system assumes that our retirement accounts are 401Ks with a monthly amount contributed. That is true for one job which has two retirement accounts drawn from it (there was only an option to show one), but for my retirement account, I write a check for $5,000 at the end of the year to fully-fund my IRA. I’ll have to fudge the numbers on this by saying I don’t have a retirement account, but instead have a short-term savings account depositing $416/mo, but I’m not sure how to record interest or growth except for to log in and empty the virtual “savings account” and manually adjust-up the 401K account.

Sophie doesn’t know we claim two children as deductions (you can enter this, but it’s not in the location you would expect to find it, nor is there a prompt to ask the question).

It took me a little monkeying around to discover I’d made a data-entry error in my account set up that made my monthly mortgage payment greater than the outstanding balance of my mortgage. I could tell that something was wrong (who has an annual budget shortfall of over $400,000…besides Congress?). I’d love to see a balance sheet that would allow me to check my data-entry work. Instead I flipped through every screen to try to tell where I’d made the mistake. Additionally, the automatic conversion from my annual data entry to the monthly result was confusing to me, because it didn’t tell me that it was going to do that.

The confusion continues when I see that SimpliFi promises to never sell me anything, but then provides free service by advertising products I might need. Maybe it’s the copywriter in me, but those two messages shouldn’t appear in the same collateral for any product.

Finally, I’m no professional, and I’m not registered with the SEC, but I respectfully disagree with Sophie’s investment advice. I’ve worked with several investment planners and they all scream bloody murder when they see how much life insurance I carry (about 4x the recommended amount). What they don’t know is that I have a special needs child, and want to ensure she has care if anything happens to my husband and I. Sophie didn’t bat an eye—or send a digital protest that I was over-insured (seeing as how eye-batting is a digital impossibility in her domain).

Also, Sophie recommended a massive reallocation of investments, including moving 32% of our investments to bonds. Are you kidding me? A two-income household with both adults under the age of 30, not planning to retire until 72, and we should have a third of our investments in bonds? I’ve certainly never heard *that* one from either of my planners.

Sophie also suggested I increase my monthly payment on my credit card to roughly 2/3 of my monthly income. Since Sophie doesn’t have to eat or feed children, perhaps that would be a reality for her, but my budget can only tolerate a payment of 1/6 of that. Sophie’s recommend “emergency fund” would keep our household operational for just six weeks. Perhaps she doesn’t live in the Pacific Northwest, where the economy comes and goes with volcanoes, earthquakes and tides?

All of this aside, Sophie gives me a B+ in my “Goal Point Average” for my 20 minutes of effort. I’m afraid I’ve got to give Sophie a D-, mostly for cool graphics and ease of use. The investment advice just isn’t my style. That said, I guess her plan is better than none at all, and I can see many potential improvements that could make this system very useful (for instance, I’d love to see it integrated with my actual balance sheet in Mint (then Sophie might know what it costs to feed my kids…).

Jessica Ward is a full-time freelance writer in the Seattle area. She writes on family and personal finance. You can follow her on Twitter as @jessc098 or read more about her family’s penny-pinching adventures at www.pennywisefamily.blogspot.com.