What lesson does Angry Birds have for banking? In the case of online brokerages, it’s adopting the software industry’s long-standing tactic of giving away a product to develop a large enough base willing to pay for more.

The “freemium” model that transformed Rovio from a game developer into a $200 million entertainment company is what firms like FutureAdvisor are relying on to disrupt the traditional fee-driven model of wealth management.

Angry Birds was first offered in a free version that the Finnish company eventually monetized through advertising, while at the same time encouraging users to buy additional level packs as in-app purchases and power-ups to help them solve levels easier.

Thanks to head-spinning viral growth, Angry Birds has been downloaded more than a billion times and is currently the top-selling paid app of all time. Rovio also makes money by selling Angry Birds toys and other merchandise, licensing rights and publishing.

Robo advisors clearly paid attention to such freemium success stories.

FutureAdvisor and NextCapital are examples of digital brokerages boosting adoption by offering a certain range of free services while enticing users to upgrade to their paid “premium” tier. Across offerings almost universally, digital brokerage executives will tell you that viral word-of-mouth recommendations are their most important source of new customers, and offering a free version significantly increases a platform’s virality.

“Clients can get free access to personalized, timely recommendations for their own portfolio, then some decide to hire us to manage their portfolio,” says Bo Lu, co-founder and CEO of FutureAdvisor. “That freemium model is unique in financial services and allows us to deliver a lot of value immediately without asking for anything in return.

“Rather than asking people to trade stocks for $8.95 per trade, they can come to us to trade stocks for no money [per trade] – we’ll do it all for you,” he says. “While there are some do-it-yourselfers, there is a much larger psychographic portion of America that wants [investing] to be done for them.

“A lot of people hear about us through word of mouth, and many of our users bring in their friends and family -- we’re experiencing slow viral growth through users’ networks.”

Traditional financial firms will have to adopt the strategy now that it has been introduced by digital rivals, says Jim Del Favero, chief product officer at Personal Capital.

"What's the expectation for customer acquisition in the 21st century? It's a freemium model," Del Favero says. "What value can I provide free that encourages you in the belief that you will get more value as a paying customer?"

Of course, how successful the freemium model will be in the robo-advisor space remains to be seen, as it is still early days. And any of the digital advice startups would sign up for becoming the Angry Birds of the online brokerage space in a heartbeat.

“It’s pretty clear that free-to-play as a model monetizes the best, but no matter what model you use, you have to make great games,” said Peter Vesterbacka, head of Rovio, in an interview with The Guardian.

Freemium “is the most efficient model out there for sure,” he said. “But I would say that it’s also a good model for the fans: you don’t need to spend any money unless you want to, and unless you enjoy the experience.”

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