While the early digital advice startups showed how technology can make financial advice more accessible for young, mass-affluent consumers, a new generation of mobile app-based robo-advisers are looking to introduce investing and saving to people who might otherwise never consider it.
Thanks to intuitive user design, clever social media marketing, low minimums and unique fee structures, savings apps like Acorns and Stash have proven successful with the millennial population that traditional financial services have had a hard time attracting.
Jackie Shroyer, a senior analyst at Corporate Insight who wrote the report covering Acorns and Stash, said that while the fees are admittedly high, the apps are employing techniques to encourage users to increase how much they save.
Acorns, for example, is filled with reminders to investors to make one-time investments and set up recurring deposits, in addition to automatically investing change from purchases. It also offers $5 to users who refer a friend.
Stash has a bright orange icon that anchors all of its pages to allow users to make deposits. Ms. Shroyer said that the orange is a stark contrast to the rest of Stash’s color scheme and is great at drawing attention.
If the goal is to capture brand new investors and help them accumulate enough money that the fees aren’t as significant, both apps are doing a great job, she said.
“These are gateways to traditional, incumbent players,” Ms. Schroyer said. “They get investors comfortable. As assets grow, it makes sense for them to move to a firm that will fit their most complex needs.”