![]() ![]() Customers can choose one of five portfolios, ranging from conservative - mostly government and corporate bonds - to aggressive - all stocks, no bonds. The firm - whose name makes the obvious allusion to how a small stashed-away acorn can grow into a giant tree - launched its app two years later.Īcorns investment accounts themselves are quite basic, giving customers a limited menu of options. “If you save up for a year and don’t even have enough for a new iPhone, it’s easy to get discouraged.” New saving tricksĪcorns was founded in 2012 by Jeffrey Cruttenden and his father, Walter, a longtime Orange County businessman who founded an investment bank now known as Roth Capital Partners. “You want to make sure people don’t get frustrated because the amounts don’t add up as fast as they wanted,” he said. Acorns’ updated app incorporates some of his insights.īenartzi said if customers don’t save enough, they might abandon the app and stop saving altogether. Benartzi’s research has focused on finding ways to increase savings and on how to influence online behavior. To that end, the company in April added Shlomo Benartzi, a prominent UCLA behavioral economist, to its board of directors. “If you can tackle someone’s core financial challenges with the simplest product and the most automated solution, I think that ultimately wins the day,” he said.įor now, though, Acorns remains focused on finding ways to encourage customers to put away a bit more cash. Noah Kerner, who has been Acorns’ chief executive since last spring, said he’s not concerned about competing apps - “I don’t believe people want to app hop.” But Kerner does acknowledge that he wants the company to offer a broader range of financial services. Investment app Stash has a similar offering, but without the save-the-change feature Digit and Qapital both offer automated savings, but put customers’ cash into a savings account. There are also a growing number of apps aimed, like Acorns, at small savers and investors. New York-based Betterment, for instance, manages more than $9 billion but has just 330,000 accounts. ![]() And it’s looking ahead to offering more than just its saving and investing tool amid stiffening competition in the emerging business of automated money management.īig “robo advisors,” which position themselves as online alternatives to traditional brokerage and wealth management firms, have amassed billions in client assets - much more than the $257 million that Acorns managed at the end of last year - though they have fewer and wealthier customers. Now Acorns has released an update of its app with features aimed at boosting how much customers save. Most accounts are small, though - about $230 on average as of last year, the last time the company released such a figure. That pitch has been appealing, with the number of accounts growing from 1.1 million at the end of last year to 1.8 million this month. “Some people will say, ‘Don't have the cup of coffee.’ We'll tell you to have the cup of coffee and invest along the way.” “We're not trying to preach austerity to the client, because that’s a bummer,” said Manning Field, the company’s chief commercial officer. The notion is to make saving and investing not only simple but virtually invisible. The company, through its app, rounds off customers’ credit or debit card purchases to the nearest dollar and invests the difference into stocks and bonds. So instead of urging customers not to buy stuff, Irvine start-up Acorns has a different suggestion: Save a little bit every time you spend. For most people, the link between long-term financial health and a few bucks spent here or there just isn’t strong enough - even though every little bit socked away can help. Or there’s the more recent admonition: Lay off the avocado toast.įat chance on that. It’s a common refrain: If you want to save money for retirement or a down payment for a house, stop buying pricey coffee. ![]()
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