One of the Personal Financial Management (PFM) favorites, Wesabe, is shutting its doors.  CEO Marc Hedlund wrote a doleful note to his users today.  Understandably in denial of shuttering his business, he euphemistically referred to the “discontinuing the Account Tab,” instead.  After five years and $4.7 million, all raised in 2007, revenue generating must have proven impossible.  Even top NY VC Union Square Partners and technology uber-publisher, Tim O’Reilly, on board let the company come to its knees.

I think this means that vanilla PFM isn’t going to cut it, unless you’re lucky enough to get picked up by Intuit.  Still the pioneers of this space have done more than create an acronym most people seem to know.  They have created a category of financial products: online, interactive tools to help us understand our money.  Last I attended Finnovate, apparently half of the presenters were PFMers of one kind or another.  Clearly, there is consumer demand to improve our financial interfaces.  Clearly, there remains demand for the nine-lives Yodlee account aggregator.  Clearly, no one is spending money trading their existing relationships for new ones recommended by the likes of Wesabe and Mint.

So if PFM addresses a need, what’s missing?  I think it’s behavior change.  We don’t just want to understand our finances.  We want to understand our finances in order to… manage our expenses … reduce debt … save more … find errors … spend better.  I’m guessing vanilla PFMs will give way to specialty PFMs that focus on some kind of specific behavior change.  Like LendingTree’s Thrive – to find a better rate; or DebtGoal – to reduce your debt; or CreditKarma – to improve your credit score.  These guys are all very targeted, not generic.  This focus allows them to target lead gen sponsors or garner subscription fees.

Wabi Sabi is one of my favorite Japanese ideas: beauty in imperfection (in butchered translation): From Wesabe’s imperfections an important industry emerges.  Not much comfort to that team, but true.