Acorns unveils initial updates to its product line after a successful acquisition
Acorns and Fidelity Join the Race to Capture the Youth Market
In a bid to introduce financial literacy and investment opportunities to younger generations, several financial institutions are venturing into the youth market. Acorns, a leading fintech company, and Fidelity, a well-established investment firm, are at the forefront of this trend.
Last year, Fidelity launched its Youth Account, offering debit cards, investing, and savings accounts to 13- to 17-year-olds. Similarly, Cash App opened its doors to teenagers in 2021, allowing them to use its services.
Acorns, on the other hand, has been making waves with its new products. The Acorns Premium Tier, a $9-a-month subscription, focuses on family money management. This service includes access to Acorns Early, a product that allows family and friends to invest for a child from the day they're born. Acorns recently acquired U.K.-based neobank GoHenry to bolster its offerings. Kids aged 6 and above, under Acorns Premium Tier, get access to GoHenry and a branded debit card to build budgeting skills.
The Acorns Money Matters Report, released in 2023, revealed that 47% of consumers feel anxious about money and 37% believe that more money equals more happiness. Acorns views itself as a financial wellness system that helps consumers grow and manage their money holistically. The company believes in starting early and investing throughout all life's stages, as reflected in their new Premium Tier launch.
Acorns Premium Tier will soon offer additional tools for couples, parents, and families to jointly manage money, investments, and retirement savings. This move aims to help families make informed financial decisions and instil good money habits in the younger generation.
Several neobanks, including Step, GreenLight, and Copper, also offer products geared toward younger people. In a unique move, Greenlight's kid-focused banking services are now available to traditional financial institutions through the Greenlight for Banks program.
However, no banks have publicly acquired licenses to offer Acorns Premium Tier with GoHenry's financial and educational services to their customers. This could be a missed opportunity for banks looking to attract younger customers and provide comprehensive financial education.
A recent survey conducted by Acorns found that more than half of the adults haven't set up savings accounts, IRA/Roth IRA, custodial brokerage accounts, savings bonds, or CDs for their children. This underscores the need for financial institutions to focus on the youth market and provide accessible, user-friendly financial services.
Acorns believes in introducing collaboration tools to help as many people as possible build good money habits throughout all life's stages. As more financial institutions enter the youth market, it remains to be seen how this will shape the financial landscape for future generations.
