Stash partners with Commonwealth on its Transforming Investor Identity Project

In 2023, nonprofit Commonwealth, with support from the Nasdaq Foundation, launched a groundbreaking research program and pilot with fintech partners, including Stash, to gain insight into how the development of an investor identity can act as a key enabler for beginner investors to overcome initial feelings of doubt and develop a sense of belonging in the investing community.

The following research blog post is part of the Transforming Investor Identity Project in partnership with Commonwealth. The project was made possible with support from the Nasdaq Foundation. This blog post is also published by Commonwealth; you can find the complete research report here.

Introduction

Recent developments in the retail investing space, including the widespread adoption of commission-free trading and better UI on mobile and desktop platforms, have made it easier than ever to become an investor. Despite increased accessibility, significant gaps remain between a widespread desire to invest among households living on low and moderate incomes (LMI)—particularly Black, Latinx, and women-led households—and taking advantage of this key wealth-building opportunity.

In this post, we explore some of the highlights from this critical research and look at the ways in which Stash’s investing platform is contributing to a more inclusive investing ecosystem. We will also look at some of the ways in which Commonwealth’s research provides insight into how these choices support beginner investors living on LMI. If you’d like to know more, check out Commonwealth’s full report on this research, as well as the toolkit designed to provide actionable guidance for providers looking to help make investing for everyone.

Investor Identity Insights

Key findings from the research include that even incremental increases in investor identity are associated with positive action; investor identity “clicks” after 6 months; perceptions of investing change during the first year for most participants; emergency savings matters more than income for retaining new investors; and representation matters for fostering a sense of belonging.

Active learning is an important part of investor identity development

One key finding from this research has been that learning is a major contributor to a sense of belonging and was the most commonly cited driver of feelings of belonging in the investing community by participants. Participants who developed a sense of belonging in the investing community were 21 percentage points more likely to have used on-platform learning features.

Stash has successfully embedded learning tools and opportunities into the retail investing experience. The variety of options they have available and their accessibility resulted in 89% of research participants on Stash using one or more learning features.

In addition to educational content such as articles, webinars, and videos, Stash has also embedded learning opportunities into the investing experience itself, erasing boundaries between learning and doing.

Emergency savings matters more than income for retaining beginner investors

Commonwealth’s research has identified emergency savings as a more important retention factor than income for investors living on low and moderate incomes. 45% of participants who started the research program with less than $500 in emergency savings ended up withdrawing from the program before it ended, while just 28% of participants with more than $500 saved withdrew.

Stash offers an example for providers looking to help new and smaller-balance investors build the savings they need to build consistent investing habits through integrated banking services.

Conclusion

Stash has been a champion for inclusive investing both through partnering with Commonwealth on this critical research and acting as an industry leader in designing a platform that welcomes beginner investors. For a complete analysis of this research, check out our comprehensive final report from this Transforming Investor Identity project. This project is also accompanied by an action-oriented toolkit with practical guidance for providers looking to implement more inclusive design and cultivate investor identity.

This is not intended to be personal financial advice or a product endorsement and is shared for informational and educational purposes only.

Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. Investing involves risk and investments may lose value.