The aggressive push by microinvesting apps to diversify features is gaining momentum.
Acorns, which in July added Adam Dell’s Clarity Money as a personal finance management partner, announced the acquisition of a retirement savings tool provider on Wednesday.
Terms of the deal for Portland-based Vault, an app that allows clients to automatically invest part of their paychecks into retirement accounts, were not disclosed.
The deal enables Acorns to offer a new feature, Acorns Later, which will gather small amounts from users’ paychecks and deposit them into IRA accounts. The roundup app currently places micropayments from purchases into a portfolio of ETFs.
Acorns CEO Noah Kerner said the acquisition was another step in addressing needs of millennial clients that have not been served by traditional wealth managers.
Though the app recently crossed the 2 million user threshold, its average account size is $921.
“A lot of people in our customer segment don't believe retirement is going to be a possibility for them in the future,” Kerner said.
It’s important to demonstrate that saving for retirement is possible, Kerner says. “It’s hard to get people to change behavior.”
Acorns’ announcement comes at the heels of a similar retirement savings feature announced by Stash Invest. Megabanks in recent weeks have also announced their own millennial-focused apps, with JPMorgan Chase and Wells Fargo introducing mobile-only banking options that also serve up PFM insights.
Acorns Later is expected to roll out in January.
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