Stash Responds to FINRA’s Special Notice On the Best Ways to Educate New Investors

This past June, FINRA, an American financial regulatory organization, requested input from financial organizations, academics, and other stakeholders on the most effective ways to educate today’s first-time investors. Because it is Stash’s mission to support first-time investors and give Americans the platform and tools to invest in themselves, we were excited to respond and share our perspective. FINRA’s recent survey findings reveal a surge in optimism and interest from younger American investors. We note similar trends. Our platform focuses on meeting the needs of these first-time investors as they begin the journey to building wealth. We now serve more than 2.1 million active subscribers and 6M Americans.¹

Our experience shows that the best way to educate new investors is to allow them to learn by doing, in an environment designed with the customers’ best interests at its core.

Stash is that platform. We are a registered investment advisor, and we provide investment advice to our customers to help them make informed investment decisions. Throughout our digital platform, we provide tools that reinforce our philosophy—what we call The Stash Way. Its pillars are: invest regularly, diversify, and invest for the long term.

Please read on for our complete response to the FINRA request. We hope it furthers our dialogue with FINRA as we pursue our mission to empower everyday Americans to invest in themselves.

¹ “Active subscribers” is defined by the number of clients who are paying subscribers as of June 1, 2021. Stash has a total of 6,857,971 accounts created within the platform as of May 28, 2021. This is not an endorsement or a statement of satisfaction by any Stash client.

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To the Office of the Corporate Secretary, FINRA:

The financial services industry is not set up to best serve everyday Americans. As you know, the majority of Americans live paycheck-to-paycheck, and more than half can’t access $1,000 in an emergency. That’s why we are so pleased to see FINRA asking for insight into the best ways to educate Americans so they make better financial decisions. We could not pass up the opportunity to respond to a subject matter that is critical to our company’s mission. We want to help everyone, including regulatory bodies like FINRA, understand the power of financial literacy by design.

We are a subscription platform empowering middle-class Americans to invest and build wealth. At Stash, we serve everyday Americans. Ninety-five percent of Stash customers have little to no investing experience.¹ By design, financial literacy is embedded within our platform. We are committed to making lifelong money skills as accessible, easy-to-understand, and actionable as possible. It’s our mission to help as many everyday Americans as we can invest in themselves.

Today, instant gratification and day-trading continues to surge, and financial education for the vast majority of Americans remains woefully inadequate. Too many Americans don’t understand the difference between trading and investing. Recently we’ve seen trends of gamification and social media coordination in investing. Unfortunately, the vast majority of Americans who are less financially literate, and typically younger, get caught up in these trends—and they are the most vulnerable. The old ways of educating this segment will not work. FINRA must continue to support investor education.

We believe that financial literacy and education must be deeply integrated into the customer experience by companies that have the customers’ best interests at its core. Investment education must be paired with the act of real-life investing for those who are of legal age. Investment education must be integrated into screens and tools that customers can look at when convenient for them, or it will be neglected and ignored by the people who need it most. Additionally, providing financial education to America’s youth will make them better prepared to invest as they become adults.

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You asked for comment on the single most neglected area in the field of investor education: We know that the best form of education is to learn by doing.

Since we were founded in 2015, more than 6M customers² have come to Stash to invest in themselves. Stash was a pioneer of fractional investing, allowing customers to open accounts and invest in increments as low as $0.01.³ Our goal has always been for people to get started and learn the power of long-term investing via the design of our platform. Our product vision is based on the premise that long-term, diversified investing via regularly scheduled investments can yield higher returns and help people invest in themselves.In support of our goal and product vision, we are also a registered investment advisor, and as such, we provide investment advice to our customers to help them make informed investment decisions. Throughout our digital platform, we provide tools that reinforce our philosophy—what we call The Stash Way. Its pillars are: invest regularly, diversify, and invest for the long term.

We thank FINRA for its attention to this topic and its continued support of investor education. We welcome and would look forward to working with FINRA on our shared mission around this topic and believe that, through working together, we can best serve investor education.

Sincerely,

Brandon KriegCEO of Stash Capital LLC and its parent company, Stash Financial, Inc.