Micro-Investing App Companies Bet on Macro Employee Perks

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By Carmen Castro-Pagan

Micro-investing apps and online financial advisers such as Stash, Robinhood, Betterment, and Wealthfront are revolutionizing how millennials save and invest. And they’re doing so while aiming to keep their workforces happy with benefits that range from catered daily meals to ski trips.

The financial sector has traditionally used “strong employee benefit packages” to attract talented employees. The packages often included lofty 401(k) matches, flexible hours, comprehensive health insurance, professional development opportunities, catered meals, and banking accessibility, according to Winston Benefits, an employee benefit administrator.

Micro-investing apps are an emerging industry. They allow users to save small amounts of money regularly and invest it in stocks, bonds, and mutual funds. To get ahead in the industry, they have to position themselves against financial giants like Vanguard, Fidelity, and TD Ameritrade for top-notch technology and financial talent. Flashy perks such as in-house chefs, Noodle Nights, summer camps, and ski trips may do the trick and serve as leverage to lure the best talent.

Micro-Investing Apps’ Perks

Launched in October 2015, Stash allows users to start investing with just $5. Based in New York City, Stash currently has 1.4 million clients, 60 percent of whom are millennials, Allyson Federbush, Stash’s head of communications, told Bloomberg Law.

Stash offers its 106 employees flexible paid time off, commuter benefits, discounted tickets for travel and entertainment, gym reimbursement, free breakfast, catered lunches, and a $1,500 annual stipend for learning and development, Federbush said. After receiving feedback from employees, the company this month will launch a 401(k) plan, and it already offers stock options and free Stash Invest and Stash Retire accounts to employees.

Knowing employees own a stake in the company gives them a sense of ownership and allows them to propel innovation, growth, and success, Federbush said. “It’s a great motivational tool,” she added.

Robinhood allows users to invest in publicly traded companies and exchange-traded funds listed on the U.S. exchanges, according to company information on the Bloomberg Terminal. Based in Palo Alto-Calif., and with another office in Orlando, Fla., Robinhood launched in March 2015 and has approximately 140 employees, the company’s head of communications told Bloomberg Law.

The company offers paid time off, catered meals, parental leave, and a fully stocked kitchen. The company also allows employees to bring their dogs to the office, a current employee wrote on the jobs and recruiting website Glassdoor. Robinhood gives a $100 wellness benefit monthly for club membership, massages, and fitness classes, another employee wrote. Employees at Robinhood also enjoy a weekly “Noodle Night,” which could either be pho or ramen, according to the employee.

Acorns, another micro-investing app, allows users to automatically invest their spare change across 7,000 stocks and bonds, according to its website. Acorns offers its employees stock options, unlimited paid time off, in-house gym, daily breakfasts, and weekly team lunches, according to a company job posting reviewed by Bloomberg Law. The company also makes monthly contributions to employees’ Acorns accounts, a current employee wrote on Glassdoor.

Larger Robo-Advisers

Betterment and WealthFront have been around a bit longer than Stash, Robinhood, and Acorns.

Launched in 2008, Betterment’s business concept is different than micro-investing apps as the company provides personalized online financial advice for individual, IRA, 401(k), and rollover accounts.

Based in New York City and with 220 employees, Betterment offers a “summer camp-type activity” and a ski trip in the winter, a company spokeswoman told Bloomberg Law. Betterment also offers gym reimbursement, parental leave, unlimited paid time off, lunches by in-house chefs, educational and networking opportunities, and flexible work arrangements.

Betterment offers a professional development allowance to full-time employees of up to $700 per year. The company encourages its employees to make meaningful connections with people through interest groups, sports clubs, regular meet-ups, and happy hours, the company said.

Betterment also fosters a family-friendly culture and work-life balance, with mothers and fathers eligible for six consecutive months of leave before and up to one year after the birth, adoption, or surrogacy of a child, according to the company.

Like Betterment, Wealthfront is another online financial adviser that provides personalized advice for long-term investment goals, according to the company’s website. Founded in 2011, Wealthfront is based in Redwood City, Calif.

Wealthfront employees enjoy catered daily lunches, free snacks and coffee, commuter benefits, health club membership, and health insurance, according to the company’s website. Wealthfront also offers random perks such as movie days, hackathons, and social activities, a software engineer wrote on Glassdoor. Another engineer said the company offered a $10,000 relocation bonus for existing employees to move close to the office.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bloomberglaw.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com

Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.

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