Top Investment Platforms That Attract Millennials

The widespread growth of fintech platforms has made it easier and faster to begin one’s investment journey with limited knowledge. It has also entirely transformed the investment industry in unimaginable ways by catering to a new generation of investors, creating healthy competitors, facilitating ease of use, lowering service charges, increasing accessibility, and much more. It also led to increased diversity among the investors’ demographics. 

While investment technology platforms aim to simplify investing for all, millennials are their primary target audience. A research paper released by Broadbridge highlights how much FinTech firms, investment advisors, full-service banks, etc., plan to increasingly target millennials in the coming years. Millennials’ approach to investing is entirely different from their parents or grandparents. 

• From setting life goals to diversifying their investment portfolio, from working towards a debt-free life to searching for new avenues to invest- their investment strategy is distinctive.  
• They love tech-enabled platforms to manage and invest their money securely and seamlessly. 

Although the market offers plenty of investment technology platforms to attract millennials, the following five platforms have managed to stand out uniquely when it comes to catering to millennials.

1. Wealthsimple

When it comes to investing, millennials love convenience, transparency, and lucrative returns. They despise engaging in tedious paperwork and visiting physical offices to interact with wealth experts for handling their portfolios. It is where Wealthsimple took the lead and started to compete with traditional investment institutions. While the platform offers a wide suite of investment services, its robo-advisor service has attracted the most millennials. 

• Wealthsimple is a Canadian fintech platform that leverages cutting-edge technology to simplify the investing needs of Millennials and Gen Z. 
• The platform focuses on helping the young generation start early in their investment journey, making it easier to invest money in a globally-diverse portfolio comprising low-cost index funds. 
• Wealthsimple has tools like tax loss harvesting, automatic rebalancing, and dividend reinvestment – something many retail platforms are starting to provide by Wealthsimple becoming a leader. 
• The commission-free trading, seamless user experience, high-interest savings, and access to seasoned experts’ advice from anywhere are the primary features that have helped Wealthsimple attract, retain, and delight most of its young investors.  

While Wealthsimple is perfect for Millennials, investors looking for niche investment opportunities may find its offering somewhat limited. Additionally, the higher management fees charged for larger accounts may irk some young investors.  

2. Robinhood

Investing has always been intimidating for people of all ages. From deciding where to invest to how long to hold the investment- it can be overwhelming. Factors like these can also prevent people from investing early in their life, as there is too much to wrap their heads around. 

• The founders of Robinhood identified this pain point and created a tech-driven investment platform that takes all these problems out of the investment equation. 
• This platform was started with the aim to ‘democratize finance for all,-’ a value that all millennials and Gen Z endorse. 
• With Robinhood, it is easier to invest in stocks, EFTs, options, cryptocurrency, etc., at zero commission. Although the platform offers plenty of investment options, the offerings aren’t as extensive as the one’s offered by traditional brokerage firms. 
• Its cash card service has attracted the most attention as it enables people to earn weekly rewards on spending that can be easily invested to earn higher returns.
• Robinhood has eliminated entry barriers imposed by traditional investment firms, making trading more affordable, accessible, intuitive, and inclusive. 

Although the platform’s values and mission have impressed the young generation of investors, it may not be the best option for seasoned investors looking for advanced research and analytical tools. Beginner investors would benefit more from using Robinhood and similar platforms.

3. Chime

The millennial culture and preferences have forced many traditional banking service providers to take the digital route. The old ways of banking and investing are no longer relevant and have given rise to new-age banking service providers like Chime. 

• It is popular and among the fastest-growing fintech companies in the U.S. that partner with regional banks to create innovative member-first financial products. 
• Unlike most traditional banks, Chime ensures people of all backgrounds, financial status, etc., get easy access to modern banking services. 
• Its suite of impressive banking features, like a fee-free overdraft facility, 2-day early access to paycheck, no-monthly fee, and automatic savings, have made Chime popular among the young generation. 
• People who like making payments on the go using their phone and being in control of their finances are more inclined to use Chime. 
• The young generation views it as the millennial bank as it caters to all their modern banking needs. However, people looking for more account options, like joint accounts and business accounts may be disappointed because of the platform’s limited account options. 

Chime’s focus on offering a more inclusive and convenient approach to banking has helped it grow a significant customer base comprising mainly millennials and Gen Z. Since the platform still receives mixed reviews from its customers online, check whether Chime fulfills your requirements before creating an account with them.  

4. Affirm

A close look at recent Gen Z and millennial trends would highlight how much the younger generations love to live their life to the fullest. Instead of saving most of their earnings for retirement or waiting for a pay raise to travel the world, they choose to live in the present while mindfully planning for the future. A report published by Goldman Sachs Asset Management echoes similar opinions. 

• Fintech companies like Affirm are helping millennials, Gen Z, startup owners, entrepreneurs, and first-generation business owners fulfill their dreams by providing affordable and flexible credit facilities. 
• Unlike traditional banks, Affirm doesn’t levy high-interest rates on its credit facility. 
• It offers flexible and generous payment plans, making it accessible to more people across all income groups. 
• Instead of paying for everything the following month, Affirm users get the option to pay over a duration of 3 to 36 months. What makes Affirm grab millennials and Gen Z’s attention is its comparatively low-interest rate. 
• Using the Affirm virtual card, people can buy furniture, clothes, accessories, fitness gear, travel trips, etc., at as low as 0% interest rate. 

Since this generation is tech-savvy, using the Affirm app is incredibly simple, and the credit facility is too good to ignore. However, the limited merchant acceptance can be problematic for some. Millennials who use traditional cards to maintain a good credit history/score may not like Affirm that much, as it doesn’t influence their credit score.  

5. Acorns

Millennial investing isn’t solely focused on earning lucrative returns. This generation places equal emphasis on convenience, user experience, and transparency; hence, platforms like Acorns are witnessing massive growth. 

• Acorns is a unique fintech company offering a micro-investing facility at no commissions. 
• This platform uses a proprietary financial engine that automatically detects and rounds up the spare change from everyday purchases and uses the same for investing in an expertly-managed portfolio of index funds. 
• Acorns has impressed a large chunk of young investors as it does most of the heavy lifting itself. 
• Users only have to connect their checking account and debit or credit card with the Acorns app and spend as they usually do. 
• The platform will automatically identify and round-up changes from each transaction and invest it in promising funds. This way, millennials and Gen Z can reap investment benefits, even if they aren’t highly experienced investors. The only problem some may have with Acorns is its limited investment options. 
• Acorns has helped many millennials women and men save and grow money without their active participation. However, since the platform is based on automated portfolio allocation depending on your risk profile, investors can have limited control over their investment strategy. 

Its simplicity and innovative offering have successfully managed to grab a significant share of young investors. 

Millennials and the Rise of Fintech Platforms

The world of investing has constantly changed to accommodate its target audience’s preferences and needs, and the same can be witnessed today. Millennials and Gen Z comprise a significant portion of investors’ demographics, and they have widely different investment preferences than their parents and grandparents. This young generation prefers flexible, accessible, transparent, and convenient investment platforms that make their life easier. Accenture’s report on millennials and money can give you more detailed insights on what this generation seeks. 

Companies that align their offering and processes to these requirements have a better chance of surviving in this highly competitive industry, while the ones refusing to adapt to changes will eventually fade away. Although the market already has plenty of tech-driven investment platforms, the ones that constantly innovate to keep up with millennials and Gen Z’s changing requirements will thrive in the long run.