Micro Advisers Acorns and Stash

The new wave of investing is with robo-advisors, and now we even have micro-advisors to consider. In this post, we will be looking at two micro-advisors, Stash and Acorns. Both are geared towards smartphone use and are easy to understand and utilize. Let us look at some of the aspects of each and see which may be the better choice for you in general.

Acorns states it is the first mobile investment application that allows you to open an account on your smartphone. The app will allow you to invest a specific dollar amount or what it calls round-ups by linking your financial accounts to the app itself. There is no limit to the number of accounts you may link to the app itself, and the accounts can be a bank checking account or credit cards. The investing of your round-ups is fairly simple, if you spend $4.50 on a sandwich, the app will automatically invest the remaining $0.50 into your account. Then you even have the ability to round an even $5.00 to $6.00 investing a full dollar. All of the funds that are transferred to the app are from your checking account and not from the credit card accounts and will invest at a minimum when you reach $5.00. Acorns then will invest in pre-selected exchange traded funds for you.

Meanwhile, Stash is also an automated investing app for smartphones. Stash has a minimum investment to open the account of $5.00. Unlike Acorn, Stash will invest in one of 30 exchange traded fund themes set in allocations consistent with your investment tolerance. The app will also allow the investment in some individual stocks as well. Stash is available on iOS and Android and can be downloaded in a few minutes, while Acorns is also available on iOS and Android but may also be accessed via its website. Also, unlike Acorns, Stash only allows you to link a single account to its platform. Any funds that are not invested will, however, earn interest until they are invested in an equity.

Both apps allow you to invest in small amounts which is why we consider them micro-advisors. And while the amounts are small it will allow you to invest and accumulate funds in a manner in which you will not even notice that the funds have been withdrawn from your checking account. You may also invest additional amounts to accelerate your savings. Both apps do offer investment management, but Stash is more flexible in this regard as it allows you to invest in more options and some individual stocks. Both do have identical fee structures, so they are even there for the most part.

Acorns unique features are it may be accessed via the Internet on the company’s website. Once you have created your account, you then link your round-up accounts to your investment account. There is no initial deposit required, and investments can be made with amounts as low as $5.00. Currently, they only offer brokerage accounts and no individual retirement account options. Acorns also has partnered with some on-line retailers to offer even more cash for your round-ups so that they will accumulate even faster.

Stash not only allows you to invest in their choices but also you are able to supplement your investments with choices of your own. By doing this Stash provides more investment options for you. Stash also has a social media aspect that allows you to share investment ideas with other users or your friends.

So how do they compare? Both charge a dollar a month for fees on accounts under $5,000 and 0.25% a month for accounts over that amount. Acorns offer free accounts for students under the age of 24 while Stash offers the first three months free. Acorns can be opened with zero money, and you can start investing with as little as $5.00 while Stash requires a $5.00 initial opening deposit. Both are offered on iOS and Android while Acorns is the only one that allows web access.

Acorns has five portfolios for you to invest in being conservative, moderate conservative, moderate, moderate aggressive and aggressive. You decide which plan is right for you and the app will invest in six exchange-traded funds in percentages that are linked to the portfolio that you have chosen. Despite the fact, there are only six exchange-traded funds they are extremely diversified and will allow for the broadest allocation with such a small number of securities. The exchange traded funds in which Acorns invests in are Vanguard S&P 500, Vanguard Small-Cap, Vanguard FTSE Emerging Markets, Vanguard REIT, iShares Investment Grade Corporate Bonds and iShares 1-3 Year Treasury Bond.

Stash also uses some questions to aid in determining what risk tolerance you are for your investments. But instead of being limited to six exchange-traded funds Stash allows the investment in 30 investment themes in conservative, moderate and aggressive styles. Stash allows the investment in thousands of exchange traded funds and some individual stocks, which is unlike Acorns.

Both apps are extremely well suited for people who wish to invest in today’s markets with small amounts. Stash offers more investment choices, but Acorns is much easier to utilize and access. You will do fine with either app, and both will serve you well. The key is to invest in the markets for your future, and both will enable you to do just that.

If you have any questions or need any additional information, please feel to contact me either here on the site or in a private email.

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