Saturday, July 19, 2008

A Review of VaultStreet

Like many people, I have accounts at several different financial institutions that I've established over the years. I've always been a bit uneasy about signing up for e-documents. For a while, I was self employed, and because I had so many business expenses, I was used to storing lots of paper in case I got audited. I also was unsure of how to organize e-docs. Would I store them on my hard drive, so that if my hard drive crashed, I would have no financial records whatsoever? What filename methodoogy would I use? Would it be easy to sort the statements by date so I could see what I had?

Or would I leave the statements in my email account, thus endangering my quota, and not being able to find the emails amidst all the spam that makes it through my filters? Would the statements get mistaken for spam and dumped into my spam box that I rarely look at because it is so large? Or would I just leave the statements on the company's web site? Problem with that is, how long do they keep them there? For investments, you need to know what you paid for a stock when you sell it so you can compute capital gains. Some stocks I might keep for 5 to 10 years. I have the prices in Quicken, but if I got audited, what to do?

So I stumbed across a website called Vaultstreet (www.vaultstreet.com), and it seemed to have a pretty good idea. Here's how it works: you log into that account, and you give it your passwords to your brokerage accounts. Then it logs in to these accounts and downloads all your statements in PDF format, and stores them all, and it sorts them by date using metatags.

I was able to import statements from ING Direct, Schwab, TD Ameritrade and Fidelity. Many of the Schwab statements came in with the wrong date, the ING statements didn't have my account # in the metatag, but otherwise, the process worked relatively well.

You can specify which other people you want to examine your documents. So you could add your accountant, and he or she could log in and view all your statements, including your 1099s and other tax forms.

However, VaultStreet only lets you do this automatic download with about 15 different institutions. It doesn't have some big funds, like Janus, at least not yet. It seems to have most of the major online brokerages, but otherwise, its coverage is pretty skimpy. They really need to enhance their breadth of institutions covered.

They also don't allow you to upload documents that you scan yourself.

It took a little getting used to how their UI works, but I got the hang of it after a few sessions.

I also question their business model: after the 30 day trial period, they charge $200 per year. With the number of institutions they have, this seems like an awful lot of money. If you compute it at the cost per statement processed, it probably works out to $5 to $10 per statement. That seems like a lot to pay for a little bit of convenience. Furthermore, this should be a product that is very sticky. I doubt many people would leave after they use it: after all, they'd then have to figure out what they would do for filing their documents. Since this is a very sticky application, they really should price it low then have somewhat aggressive increases each year, especially as they add new institutions to download from.

Furthermore, VaultStreet should be going to smaller institutions to get them to pay Vaultstreet for processing their statements. Every statement that is printed and mailed must cost the financial institution at least $1: postage, paper, printing, stuffing, and so on. So if VaultStreet could get them to pay them instead, Vaultstreet would get a lot of individuals using their site. These individuals would only be able to access the statements that the institutions were paying for, but might decide to subscribe to get access to everything. They could do this with utilities (they've got Verizon broadband and Verizon telephone now, but that's it), mortgage companies, leasing companies, etc.

You'd think that by charging the institutions a fairly low amount, they'd get a lot of new customers, and some of these might sign up for the full package.

It'd be really nice if you could upload your exisitng stuff to the site. Because let's face it, you're probably going to have some paper documents from institutions that are too small for them to worry about. Another thing that would be excellent would be a way to add documents via email. So if I were emailed a statement, I could just forward it to a specific email address, and it would be added to my documents. (If they had email uploading, it'd be nice if you could specify meta tags like the statement date in the email message somehow).

I'd love to be able to scan and upload all this paper I have, and it's not just financial stuff. For instance, receipts for major appliances purchased. Car repair records (I have an extended warranty: what if my engine goes bad and the car company says I never changed the oil? So I keep all my valvoline receipts). A few weeks ago, I was stopped at a light, and the woman behind me didn't stop. That resulted in my needing a new bumper, paid for by her insurance company. It also resulted in about 30 pages of paperwork: accident report, insurance claims, mechanic, rental car agreement, and so on. Wouldn't it be nice if I could take all those pages, put them on my scanner, and then upload the file, or better yet, just attach it to an outlook email, type in the metatags (i.e., date, and brief description) and then upload it?

Don't get me wrong, I really like what Vaultstreet has done so far: it is a great idea to suck in stuff from the financial institutions directly. But I think the company has really overpriced its product based on how many statements you're likely to get per year from the institutions it supports now. Seriously, it's going to probably equate to $5 to $10 per statement, as I doubt you'll get more than 20-40 statements per year from the institutions they support. I'd also like to see Vaultstreet allow generic uploading, and especially generic emailing. As it stands now, it seems to be a very interesting technology, but unless you have a myriad of accounts at the few insttutions it currently supports, it's going to be hard to justify the $200 annual price tag.

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