George Lucas

Investment start-up app Acorns is poised to tap a fresh growth market as financial advisers realise its potential as a sound business strategy that can contribute to the longevity of their businesses by reaching out to younger Australians.

The App now has 220,000 sign-ups since its launch in 2016 (100,000 monthly active users), and according to Acorns’ managing director, George Lucas, this “staggering growth” has occurred largely because of word of mouth.

“There is a misconception among many in the financial planning community that they needed a Statement of Advice (SOA) to recommend the Acorns App to their clients or potential clients.

“This is simply not the case. The Acorns App is not a financial product; it is like a website, and as such is not a financial product. An SoA would be required if an adviser recommended what portfolio suits a client as that would be personal financial advice.

“This message is now better understood by financial advisers, and we expect them to embrace this fintech App as a new way to engage the next generation of clients.

“What’s particularly appealing to them is the App’s young audience, with about 70% of downloads by investors aged between 25 and 34 years (90% are under 45) who are discovering the benefits of regular, small savings and investments. This gives advisers the opportunity to tap the younger audience of new and existing clients.”

The App allows Australians to round up their daily purchases and automatically Invest the change into a diversified portfolio of ETFs. It has been designed to introduce first-time investors to the stock market and remove traditional entry barriers, such as high fees, associated with the sector.

Before Acorns, first-time investors in financial markets were traditionally confronted by large market fees, commission and minimum investments sums of around $1000. By simplifying this approach, Acorns enables its users to start their journey to investment with the minimum balance of $5.

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