LearnVest, a financial management website that was built as an electronic financial advisor for mass market investors, will announce Tuesday morning that it is now a registered investment advisor and will be hiring more advisors in the coming months.

In addition the New York-based firm has significantly beefed up its existing online tools. The moves expand upon the tech start-up's model of providing clients with financial advice augmented by online educational and planning tools.

"Our clear mission is to make financial planning not a luxury," said Alexa von Tobel, LearnVest's chief executive officer. "We think technology can improve this, not only for planners, but customers," she said.

The company expects to have 50 advisors, who must be certified financial planners, on staff by the fall, both full and part-time. Part of the appeal to advisors who might be considering moonlighting is simple: not having to find clients. Plus, unlike some of its competitors that have set up shop as broker/dealers, LearnVest will not be selling financial products, leaving advisors with one job: providing financial advice.

"What's really powerful about this is we don't sell products, so at the end of the day, we can provide the most trusted advice to our customer," she said.

The announcement is the latest in a burst of activity over the last few years from a flock of young technology companies scrambling to serve the neglected mass market. Their larger competitors have taken note: this summer LPL's NestWise unit announced it would buy LearnVest's closest competitor, Veritat Advisors. That fee-only RIA was the brainchild of Wharton professor Kent Smetters.

Although the idea of using technology to bring down the costs of serving otherwise non-profitable customers is attractive, it has also had vocal critics. Some of the early entrants boasted of putting traditional advisors out of business, as TurboTax had thinned the herd of tax preparers. However, many have been largely using algorhythms to create simple, low-cost indexed portfolios for clients, without offering access to advisors.  And for that reason, the entire breed has been tarred with the epithet "robo-advisor."

Many critics, including Michael Kitces, a CFP at Pinnacle Advisory Group in Columbia, Md., have derided the start-ups, insisting that technology is no replacement for the human connection.

"The simple reason why robo-advisors are no threat to real advisors is that the services they offer are nothing like the comprehensive financial planning process offered by a true financial planner," Kitces wrote in his blog. "For better and for worse, the low cost offering of at least the current suite of robo advisors generally begins and ends with setting an asset allocation. In other words, they're not actually financial advisors at all. They're investment advisers; in fact, most of them are actually RIAs simply operating a basic assets-under-management asset gathering business model," he wrote in his blog this summer. 

LearnVest's von Tobel strongly rejects the robo-advisor label, pointing out that what sets her firm apart is clients' "unlimited" access to their own, designated, live CFP, via phone and email. Plus, by being advice-only, her firm avoids the asset-gathering charge. Here, she believes "discount advisor" is a more accurate term.

Yet, whatever it's called, unlimited access is expensive. Under LearnVest's new three-tiered pricing model, clients pay from $89 to $599 a year for unlimited access to their planner. However, the majority of the contact for most clients will be over email. Budget Starter, at $89, gets clients one diagnostic phone call to help create a budget, followed by three months of unlimited email support. The Five-Year Planner, for $349, buys a diagnostic call with plus quarterly phone check-ins and one year of unlimited email support. The Portfolio Builder, for $599, gets five-year financial goals and investment guidance, via the same diagnostic phone call, three quarterly check-ins and a year of unlimited email support.

Although at first blush, it may look skimpy to the uninitiated retail customer, four phone calls a year would probably be generous for many small clients at a traditional RIA. Von Tobel said after extensive feedback from clients, the firm concluded that quarterly check-ins were best.

LearnVest's clients run the gamut from those with zero assets to $12 million; the average paying customer is earning over $100,000. (The site also offers some planning tools for free.)

Von Tobel would not disclose how many clients LearnVest has, saying the board of directors is keeping that information under wraps until the company's next round of news, expected to come in four months.

LearnVest is betting that an exclusive relationship, even one conducted primarily over email, is what will set it apart from its competitors.

That, and better technology.

Von Tobel said that her firm has spent more than $100,000 on building a better mousetrap, and testing it with a myriad of focus groups.

"We know exactly what customers want and how they want to interact with planners in this day and age," she said.  One of the things customers told them was that they want a personalized experience that covers all of their financial lives, not just investing. They also wanted continuous support and motivation that keeps up with the changes in their lives.

Money Center, the main tool, allows clients to link various accounts, and see what they're spending, in real time. The platform offers recommendations based on the client's spending, budget and financial goals. It also features easy-to-grasp visualizations to help the client track the progress of their goals over time. One main complaint LearnVest's research found was that clients found that financial tools in general are too complex.

The software also allows the planner to view the Money Center pages, in real time, with the client. This solves what von Tobel said was a consistent complaint from advisors: time wasted going back-and-forth getting information from the client. "Now they're literally on the same page," she said.

The firm will roll out a free iPhone app in the coming weeks, which will allow clients to track spending and check on their budget. Credit and debit transactions are automatically categorized, and clients can see their budgets update as they log cash purchases.         

Still, even with more of the human touch, some analysts were skeptical of the online-based approach.

"They're good solutions, but I think they're really underrating the relationship aspect of why people buy financial services," said Tyler Cloherty, an analyst at Cerulli Associates.

He said that some firms have had success with online platforms, but they were the Charles Schwabs and Fidelities of the world, which already had established brand names and enormous branch networks. Cloherty questioned how, even with massive marketing campaigns, little-known start-ups would bring in clients without advisors in branches to call on clients, or any type of distribution network.

He added that most advisory businesses still get clients the old-fashioned way: "go out and do hand-to-hand combat."

"Merrill Lynch can advertise as much as they want, have a good brand perception of the firm, but ultimately, it's going to be when you meet that Merrill Lynch rep and he shakes your hand and asks you to be his client," he said.