March 2018 – The Brokerage Disruptors: Profiles of Acorns, Robinhood and Stash

In an attempt to draw the younger population into the investing world, multiple start-ups have launched platforms to disrupt the brokerage industry with the promise of low fees, low minimums and an easy-to-understand investment process. Breaking away from our traditional Broker Monitor coverage set, this report focuses on three of these disruptors—Acorns, Stash and Robinhood—to analyze the marketing tactics, fee structures and platforms that made these firms successful. The overarching theme is that these platforms broke down the traditional barriers to entry, making investing more accessible to everyone, no matter net worth or investing experience. Garnering great success, Robinhood boasts over four million accounts, while Acorns has over three million and Stash just under two million. These numbers are cause for concern among some incumbent brokerages that are struggling to gain new clients and retain their existing client bases.

Through light-hearted and eye-catching ads and social media posts, the firms target the Millennial population which has historically lacked trust in big banks and been somewhat elusive to incumbent brokerages. The platforms themselves feature an intuitive design and easy-to-understand trading and transferring capabilities, aiming to take the stress out of investing and make it interesting and enjoyable. The firms also encompass the mobile-first mindset of Millennials, as both Stash and Robinhood began as mobile-only platforms, and all three firms mostly promote the mobile apps on their public sites. The competitive fee structures and low minimums are also a big draw for lower net worth individuals. Acorns and Stash, micro-investing platforms, require a low $5 minimum and charge $1 per month for accounts with balances under $5,000. Robinhood stands out for charging no fees and requiring no minimums for its standard self-directed brokerage account.

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