Beyond Robinhood: 4 Financial Apps That Help Individual Investors Get Started in 2022

Table of Contents The Robinhood app has been credited with transforming retail trading. Pictured: Times…

While

Robinhood Markets Inc.’s

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trading app gets all the attention, most financial professionals agree that short-term trading isn’t the way to build long-term wealth.

The app was all the rage last year—with its stated goal of democratizing investing, while at the same time coming under fire for fueling an online-trading frenzy that left many short-term investors burned.

But Robinhood isn’t the only financial app out there. A host of other ones are available to help young savers and investors get started, giving them a low-cost way to diversify their portfolios. Here’s a look at some of them.

The Robinhood app has been credited with transforming retail trading. Pictured: Times Square area outside of the Nasdaq in New York during Robinhood’s IPO event in July 2021.



Photo:

Amir Hamja for The Wall Street Journal

Acorns

What you can do: The Acorns app combines personal checking, investment and retirement accounts in one app. The automated investment account offers a choice of different portfolios with diversified holdings designed for long-term investing. Users can invest spare change from everyday purchases and make recurring investments daily, weekly or monthly. In addition, users can automatically invest a percentage of their paycheck. The company also offers tips on family financial literacy, investment accounts for children and a gifting feature for extended family members. Users can earn bonus investments through purchases made at one of Acorns’ 15,000 retail-partner stores.

What you can’t do: Acorns doesn’t offer day trading or access to options or margin trading. For now, customers can’t invest in individual stocks. But in the coming months, the company plans to broaden its investment offerings to also allow customers to trade in stocks and some other investments. Acorns plans to recommend that customers invest 90% of their money in the diversified portfolios it offers and 10% in stocks. Cryptocurrency isn’t currently available, but the plan is to include it when portfolios are made customizable.

Fees: Acorns is a subscription business with no hidden fees or transaction charges. Currently, customers are offered two subscription tiers. Acorns Personal, for $3 a month, bundles investment, retirement and checking, plus ways to earn more money and grow financial literacy. Acorns Family, which costs $5 a month, offers all features included in Acorns Personal, as well as investment accounts for kids, family financial literacy and gifting.

M1 Finance

What you can do: Users of the M1 Finance app can purchase full or fractional shares of more than 6,000 stocks and exchange-traded funds to build a custom investment plan. They also can select from more than 80 portfolios created by M1. Portfolios can be automatically rebalanced as investors deposit and withdraw cash. M1 also offers a checking account and debit card, and users can borrow against their investment account up to 35% of the account’s value. Account owners need to be over 18, but custodial accounts are available.

What you can’t do: Options trading isn’t offered. Nor can users purchase mutual funds or crypto, though there are plans to offer those features at some point. For basic account holders, trades are processed once a day starting when the New York Stock Exchange opens at 9:30 a.m. ET and concluding when all orders have been completed.

Fees: The basic trading and savings account is free. M1 doesn’t charge management fees or commissions. There are some miscellaneous fees for certain services, such as wire transfers or paper statements. The platform also offers a $125-a-year premium subscription which includes perks such as an afternoon trade window, custodial accounts, cash back on debit and checking, better borrowing rates and access to the platform’s credit card.

Subscription-based Stash offers a managed investment portfolio, but doesn’t allow real-time trading.



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Stash

Stash

What you can do: Stash is a subscription-based platform that offers budgeting tools, direct deposit, a checking account and a managed investment portfolio with crypto exposure and other products based on around 3,500 investments. Fractional shares in single stocks and ETFs can be purchased. Users of Stash’s Visa debit card, issued by Green Dot Bank, can earn a percentage of their purchases back in stock. When the transaction involves a participating merchant listed on the platform, the stock issued is in that merchant’s company; otherwise it is a stock or ETF of the card user’s choice.

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What you can’t do: The platform doesn’t allow real-time trading; orders for stock trades and other investments are carried out during four trading windows throughout the day when the market is open. Users can’t speak to a financial adviser, buy options, trade on margin or short stocks.

Fees: Monthly fees of $1, $3 or $9 are charged to access most services. For $1 a month, you get the basic wealth-building services. The $3 tier also comes with a retirement account. The $9 price point offers additional features such as double stock rewards, and investment accounts for children.

Stockpile

What you can do: The Stockpile app offers trading in more than 4,000 stocks and ETFs. Fractional shares can be purchased. Children under 18 can have custodial accounts, though all of their trades need to be approved by an adult. App users can link a basic checking account or fund their account using a debit card. There is no minimum balance.

What you can’t do: Options trading and trading on margin aren’t available. Trades are processed once a day, at the end of the trading day. Users can’t purchase any stock that trades below $3 a share, cryptocurrency, bulletin board securities, pink-sheet stocks or certain foreign stocks.

Fees: There are no membership fees or commissions. Stockpile does charge transaction fees for some services such as domestic wires, account transfers, paper checks and returned checks. Money is earned from customers’ trading activity, specifically from its clearing firm where it routes customer orders, according to regulatory documents.

Ms. Winokur Munk is a writer in West Orange, N.J. She can be reached at [email protected]

Many are calling decentralized finance, or DeFi, the “Wild West of finance.” This fast-growing industry aims to provide automated banking services for cryptocurrencies to everyone, with no middle men. But DeFi is still in its early stages, which means there are risks. WSJ explains. Photo illustration: Tammy Lian/WSJ

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