Then again, if the market is down, it's possible to lose money in addition to paying the fees. For a typical account balance of $156, an average return of 8 percent would mean $12.48 earned for the year, hardly enough to cover the fees. Acorns and Stash charge users $1 a month for accounts with less than $5,000. Investing small amounts removes some of the traditional barriers to investing, but it comes at a cost. Stash, which launched in October 2015, allows investors to get started with as little as $5. With $73.6 million under management reported on its form ADV in January, Acorn's average account balance is small at just $156. Which States Have the Most Investment Advisors? | CredioĪcorns, which allows users to "invest the change" by rounding up daily purchases and investing the difference, has helped more than 472,000 people become investors, according to its most recent filing with the Securities and Exchange Commission (SEC). “Any way that you can get a millennial excited about investing it’s better than what they’re doing now.” They’re approachable,” said 21-year-old Jessica Rabe, an assistant vice president and research associate at Convergex Group. ![]() “The benefit of these apps is that they engage millennials. Still, many experts say something is better than nothing when it comes to investing. Keep the Change also protects against overdraft fees, another benefit investment apps do not offer. Keep the Change is a free service, however, and the savings are FDIC-insured. Since 2005, savers in the program have accumulated a total of $8 billion. Bank of America's Keep the Change savings program is a good example. “It’s easier to part with $1 fifty times than it is to part with $50 once,” said Jeff Cruttenden, co-founder of Acorns. They’re meeting them where they are today by allowing users to invest small sums of money and walking them through the process of choosing investments.įor aspiring investors, starting small can be a good thing, as long as they keep going. Companies like Acorns, Stash and Clink aren’t waiting around for millennials - adults aged 20 to 35 years old - to come to them. millennials and counting, the financial services industry is increasingly interested in getting the other half up to speed.Ī growing number of apps may beat them to it. Simply getting started is an accomplishment, something to write home about or at least share on Twitter or Facebook.ĭespite the fact that three out of four young adults think better money management would give their family a brighter future, only half feel they are actually in control of their money, according to a recent study from Edelman. ![]() Opening an investment account is a financial milestone, but for many young adults it's also a formidable task, especially for millennials who are often living paycheck to paycheck, or struggling to keep up with student loan payments.
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