More Americans than ever are investing on their phones and leveraging new commission-free investing tools. But, how widespread is the adoption and how do consumers feel about these products and tools? The College Investor looks at the changing landscape of investing and how investors want to pay to trade stocks.
The College Investor surveyed 2,000 Americans to find out how they prefer to invest, how they want to pay for it and how they feel about these tools.
The full survey findings may be viewed here: https://thecollegeinvestor.com/34886/investing-app-survey-2020/
Here’s what was found:
– 78% of Americans are familiar with investment-as-a-service products like Acorns, which charge a monthly subscription fee.
– 75% of Americans are familiar with free trading apps like Robinhood, which advertise commission-free stock and options trading.
– Only 43% of Americans were familiar with robo-advisor services like Wealthfront or Betterment.
When it comes to how people want to pay for investing, it’s divided among Americans:
– 34% of respondents preferred a monthly-fee based model with unlimited trades.
– 33% preferred a flat-fee commission system (such as $4 per trade).
– 28% preferred commission-free trading, with the understanding that the free options may be limited.
– Only 5% preferred an asset-under-management (AUM) model for pricing.
With pricing in mind, it’s interesting to see how consumers view how these companies make money. When it comes to commission-free trading, only 45% of respondents understood how free investing apps make money. Yet, 61% of investors thought it was important to understand how these companies make money.
Robert Farrington, founder of The College Investor, says, “More and more investors are looking at investing apps and services to help them manage their money. And it appears that commission-free trading apps are going to lead the way. It also appears that people are becoming frustrated with the traditional asset-under-management approach to money, with both less popularity of robo-advisors, and a low preference for the AUM pricing program.”
The College Investor posts fresh content related to the areas of personal finance, investing and student loan debt and more, on a regular basis. The College Investor also hosts a daily podcast on money topics, which can be found here.
Published at Tue, 08 Dec 2020 23:43:52 +0000