TheStreet sat down with the CEO of Acorns, Noah Kerner to discuss the importance of financial education as well as the launch of its new premium tier.
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00:00 You're looking really to try and maybe create some of these,
00:03 not necessarily spending habits,
00:05 but saving habits for children.
00:07 What does that look like and why was that so important
00:09 for you and the business at this point?
00:11 - Yeah, so in around 2018, we sort of stepped back
00:14 and said, you know, we're doing a good job
00:16 serving the everyday individual,
00:18 but the family constellation is really important
00:20 and it's really the biggest market in the world.
00:22 So how can we start empowering parents
00:24 to take care of their kids?
00:25 And also, how can we start getting kids engaged
00:27 in financial literacy, learning about money
00:29 and developing money skills?
00:31 So in 2020, we launched Acorns Early,
00:33 which I think, I'm a little biased,
00:35 but I think is the easiest way for parents
00:37 to save and invest for their kids,
00:39 to help teach their kids money skills.
00:41 And then last year, we bought GoHenry,
00:44 which is a wonderful kids money management product
00:48 and sort of helps kids with an allowance card.
00:50 Like as a parent, you can reward your kids for doing chores.
00:54 They can take their money, they can save it,
00:55 they can spend it on the card, they can learn about money,
00:58 they can give, all that kind of stuff.
00:59 It's a really wonderful way to sort of teach
01:01 your kids money skills and get them started
01:03 with the whole journey of money,
01:04 since it's really not something taught in schools.
01:07 And so it actually, kids start as early as six.
01:10 Parents set it up, kids start learning,
01:13 it goes all the way through 18.
01:14 And then the idea for us is all about life stages.
01:17 So we start you with Acorns Early as a parent.
01:20 The parent can start, any parent can start saving
01:22 and investing for their kids at birth.
01:24 Then at six or seven, you can get your kids involved,
01:26 get your kids engaged in developing money skills.
01:29 And then all the way to 18,
01:30 and then you start doing more advanced money management
01:32 with Acorns, saving and investing for the future.
01:34 - And from where you're situated, Noah,
01:36 how important is that financial literacy?
01:37 Like you said, unfortunately, the reality is
01:40 these are not really things that are necessarily taught.
01:42 And far too often, we have young adults
01:44 in the American workforce, they get those first few jobs
01:47 and it may really take them a while to get comfortable
01:49 with their own relationship with money.
01:51 So talk to me about the financial literacy component
01:53 about this, 'cause I feel like especially
01:55 with the work with GoHenry,
01:56 that really seems to be something
01:57 that you're trying to solve for.
01:59 - Yeah, I mean, we talk a lot about compounding
02:02 and the power of compounding.
02:03 There's a cool stat, which is if you start
02:06 with $5 a day at birth and invest all the way
02:09 through retirement, you'll have $4.5 million
02:12 based on a relatively conservative compounding rate.
02:14 If you start at 18, you'll have $1.5 million.
02:17 There's a sort of round stat.
02:19 But I also think compounding has to do with learning.
02:22 And so there's functional compounding on your money,
02:25 but the power of learning about money
02:26 and the compounding effect of getting smarter
02:28 with your money I think pays dividends,
02:30 no pun, as you go through life.
02:33 - Noah, and of course, very exciting news
02:34 in terms of a new tier and something that's very important
02:38 to you and the company.
02:39 Talk to me about that and what are you most proud of
02:42 in terms of offering, knowing that something
02:44 like this does not exist?
02:45 - So we just announced our premium tier
02:47 and really it's the first family plan in financial services.
02:51 And as I was saying before, we acquired GoHenry
02:54 to help unlock this.
02:55 And so you get, as an adult, you get products for yourself,
02:58 you get products for your kids, everything in between.
03:01 You get $10,000 of free life insurance.
03:03 You get a complimentary will.
03:04 We're gonna be announcing free tax planning services.
03:07 So it's really a bundle of products and services
03:09 for the family.
03:11 And for a $9 value, just as an example,
03:14 the GoHenry product is $9.99 standalone.
03:17 So $9 as a kind of combined price point is really good.
03:20 And there's nothing out there like it in the market today.
03:22 So we're excited to bring it to market.
03:24 (air whooshing)
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