Robinhood vs Stash vs Acorns
Technically, robo-advisors don’t advise as much as they compute. But, if you’re looking for easy access and the ability to start investing, they’re your lowest-resistance place to start. The pros and cons of some of the most popular investment apps are broken down below.
Given we’re a more high-touch financial services option for millennials, we thought we’d give you a lay of the land when it comes to a few of the low-touch financial services options. And by low touch, we’re referring to investment apps. Investment apps like Robinhood, Stash, and Acorns.
But first, let’s take a second to break down what we mean by financial services. Because, technically, your finances are being serviced with an app. But in a minimal way. It’s like calling the rain a car wash. Technically, the dust is no longer present. But you know there are better options out there when you’re ready to step up.
But any kind of start is better than not starting, so nicely done. And well played doing a little research before hopping on the bandwagon of whoever is #1 in the app store right now.
We’re sharing our professional opinion on some of the most popular investing apps out there. Buckle up.
What are investment apps?
So, let’s start with what the hell an investment app is in the first place. An investment app is a robo-advisor that customizes a portfolio for you based on your goals and risk.
You’ve probably heard the term “robo-advisor” thrown around a lot recently.
And if not – you just did. Twice.
According to Investopedia (the financial Merriam Webster), robo-advisors are digital platforms that provide automated, algorithm-driven financial planning services with little to no human supervision. A typical robo-advisor collects information from clients about their financial situation and future goals through an online survey, and then uses the data to offer advice and automatically invest client assets.
In short, robo-advisors don’t really advise as much as they compute.
Not always a bad thing. Keeps the emotions out of investing. But that’s about it.
The good
We’ll get to the warnings a little later, but let’s start off on the right foot with the good that each of the top three investing apps bring to the table. Shall we?
Disclaimer: we chose these three apps because they are the apps we are most frequently asked about, they’re in the top 5 in the app store, and they’ve been in the news a ton lately. There are plenty of other apps out there that help you to get started with investing if you decide to move forward with a robo-advisor, but these are the three we’re breaking down for you.
Robinhood
The insane nostalgia the name “Robinhood” brings is second only to the commission-free stock, ETF, and options trades. Robinhood is a true discount broker. Although their offerings may not be as robust as some other brokerages, Robinhood has some of the lowest costs in the industry. And lower fees on the app means more money in your pocket (eventually).
Stash
To be super clear, right off the bat, we are not Stash. We are Stash Wealth. No affiliation or conflicts of interest here other than being impressed with their name choice.
Stash simplifies the process of selecting investments with an app suited for beginners. The Stash app is also full of educational content for people looking to understand what it means to invest and what all of the jargon actually means.
Acorns
Of all the investment apps, Acorns is great because it finds investment dollars for you. Acorns’ spare-change savings tool and cash-back rewards program make “investing” easy. When you link your debit or credit card, Acorns will automatically round up each purchase to the nearest dollar and invest the unspent change in your portfolio. So investing becomes a subconscious practice. Not a bad way to get started.
The not great
Remember the warnings we, well, warned you about? Yeah. Here they are.
Robinhood
To put it plainly, Robinhood falls short in their customer support. Perhaps because their hands are full pretty regularly with frequent lawsuits. But that’s just an educated guess on our end.
Other than slim support options, Robinhood has found themselves in hot water on more than one occasion with regulators. And by regulators, we mean the powers that be that keep you from being taken advantage of.
Because of the zero fee structure on trading, Robinhood has been accused of gamifying investing and encouraging active investing methods. If you’ve been around here for any time at all, let’s say it all together, investing isn’t _____.
Good. Good.
And, unfortunately, Robinhood has made active investing feel as close to a slot machine as possible. The bad habits we see in most Robinhood users take months for our financial planners to unwind. Remember, we’re here to make sure you aren’t your own worst enemy.
Stash
Stash bundles a checking account, retirement accounts, and investments accounts together through a subscription model. NerdWallet likes the fact that It does make investing more accessible through fractional shares and customizable portfolios, but there are more cost-effective options for beginners.
While Stash advertises a little more hand-holding than the typical robo-advisor, they give general education advice, not personalized investing advice. Something to be wary of.
Acorns
For most people, those round-ups and additional retailer contributions don’t add up to much. So while it’s a great way to start investing, if all you can manage is to round up your change, don’t sign up for Acorns and plan to meet your mid- and long-term goals solely by rounding up.
Our favorite investment app
Each of the investment apps we just went over has elements of education and automation. Which we’re fans of. They all help users understand how to invest and reach their goals, but which one is the best pick for you? That depends on which features are most important to you.
For the start-from-scratch-beginner investor, we suggest Acorns. This app will help you get in the habit of watching incremental changes build up over time.
For the efficient investor looking to house all of their financial information in one app, we suggest Stash.
For the “I need to learn things the hard way” type of investor, we suggest Robinhood. Remember, time in the market beats trying to time the market. But if you’re thinking to yourself, “yeah, yeah, I’ll be fine,” go ahead and download Robinhood. Just don’t say we didn’t warn you.
Don’t stop at first base
When you don’t know how to prioritize your goals, or when you’re fighting with your partner, or when you have questions outside of what a generalized Google search can answer, these investment apps can’t help you. While a robo-advisor is good for computing,
We believe technology should support a conversation, not replace it.
Apps are a great place to start getting in the practice of investing. But they aren’t how you win the game.
When you’re ready to take things to the next level, we created the Stash Plan for you. Or you and yours. Or you and your business. This type of high-touch service has been reserved for the ultra-wealthy Wall Street client, but we think that’s bull sh*t. Just because you aren’t a millionaire now doesn’t mean you aren’t ever going to be one. And we help you figure out how to get there faster. So if you’re a 20-30something who’s making good money but wants more to show for it, get started on the right foot and consider skipping the investment app step and graduate straight to a financial planner who works with people just like you.
Take the HENRY Quiz or book a call to find out if you qualify.
Stash Wealth provides financial plans designed to assist high earning young professionals build and manage their wealth.
Stash Wealth offers a pragmatic approach to financial planning and wealth management. Whether saving up for Tahiti or a Tesla, we help you achieve your short-term and long-term goals.
Written by Priya Malani
Stash Wealth, Founder & CEO
Priya is a force in the personal finance space. As an industry disruptor, she specializes in bringing the unapproachable world of money to young professionals across the country.