Acorns, a fintech app that specializes in micro-investing, is powering the next generation of investors.
Beyond catering to the financial needs of adults, Acorns extends its reach to the younger generation with Acorns Early, which allows parents to create a custodial account for a child right in the app, helping them save for their future.
The company also recently announced a new premium tier placing a strong emphasis on family-oriented financial services. Subscribers to this tier will gain access to GoHenry, a financial education platform, in addition to the benefits of Acorns Early. This comprehensive approach ensures families can proactively and collectively prepare for their financial milestones.
TheStreet sat down with the CEO of Acorns, Noah Kerner to discuss the importance of financial education as well as the launch of its new premium tier.
Full Video Transcript Below:
J.D. DURKIN: You’re looking really to try and maybe create some of these not necessarily spending habits, but saving habits for children. What does that look like and why was that so important for you and the business at this point?
NOAH KERNER: Yeah so in around 2018, we sort of stepped back and said, you know, we’re doing a good job serving the everyday individual, but the family constellation is really important and it’s really the biggest market in the world. So how can we start empowering parents to take care of their kids? And also, how can we start getting kids engaged in financial literacy, learning about money and developing money skills? So in 2020, we launched Acorns Early, which I think I’m a little biased, but I think it’s the easiest way for parents to save and invest, for their kids, to help, to help teach their kids money skills.
And then last year we bought GoHenry, which is a wonderful kids money management product and sort of helps kids with an allowance card. Like as a parent, you can reward your kids for doing chores. They can take their money, they can save it, they can spend it on the card, they can learn about money, they can give, all that kind of stuff. It’s a really wonderful way to sort of teach your kids money skills and get them started with the whole journey of money, since it’s really not something taught in schools. And so it actually kids started as early as six -- parents set it up. Kids start learning. It goes all the way through 18. And then the idea for us is all about life stages. So we start you with Acorns Early as a parent, the parent can start. Any parent can start saving and investing for their kids at birth. Then at 6 or 7, you can get your kids involved, get your kids engaged in developing money skills, and then all the way to 18. And then you start doing more advanced money management with Acorns, saving and investing for the future.
J.D. DURKIN: And from where you’re situated, Noah, how important is that financial literacy, like you said, unfortunately, the reality is these are not really things that are necessarily taught in far too often we have young adults in the American workforce. They get those first few jobs and it may really take them a while to get comfortable with their own relationship with money. So talk to me about the financial literacy component about this, because I feel like, especially with the work with GoHenry, that really seems to be something that you’re trying to solve for.
NOAH KERNER: Yeah, I mean, we talk a lot about compounding and the power of compounding. There’s a cool stat, which is if you start with $5 a day at birth. And invest all the way through retirement. You’ll have $4.5 million based on a relatively conservative compounding rate. If you start at 18, you’ll have $1.5 million. This sort of round stats. Sure but I also think compounding has to do with learning. And so there’s functional compounding on your money. But the power of learning about money and the compounding effect of getting smarter with your money, I think pays dividends no pun, as you go through life.
J.D. DURKIN: Noah and of course, very exciting news in terms of a new tier and something that’s very important to you in the company. Talk to me about that. And what are you most proud of in terms of offering knowing that something like this does not exist?
NOAH KERNER: So we just announced our premium tier. And really, it’s the first family plan in financial services. And as I was saying before, we acquired GoHenry to help unlock this. And so you get as an adult, you get products for yourself, you get products for your kids, everything in between. You get $10,000 of free life insurance. You get a complimentary will. We’re going to be announcing free tax planning services. So it’s really a bundle of products and services for the family and for a $9 value. Just as an example, the GoHenry product is $9.99 standalone. So $9 as a kind of combined price point is really good and there’s nothing out there like it in the market today. So we’re excited to bring it to market.
