Is Stash Invest Legitimate Firm?
StashInvest.com is a relatively new player in the financial service sector. It is a personal
investment service designed to simplify investing. Aimed at millennials, it’s design and voice feel
a little fluffy–like investing with training wheels on.
Investments at Stash start with as little as $0.01 (stocks priced over $1k have a $0.05 minimum).
Users can choose from thousands of stocks and ETFs.
Educational services are also provided in the form of weekly emails and a “Education” tab on the app which
provides articles such as “Health Care Fever: Quarterly Earnings and the House Passes the AHCA” as a way to teach users how world events and political decisions
affect the market.
Is Stash Invest Scam?
Stash Invest is not a scam. They earn money by charging investors a small monthly fee. There are 3 pricing
plans available: Beginner ($1/month), Growth ($3/month) and Stash+ ($9/month).
The Stash Invest management fee compares very favorably to fees typically charged by financial advisors. Those average about 1% annually, but can be as high as 2% or
more.
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Is Stash Invest Insured and Regulated?
Since Stash Invest offers brokerage services to clients, it does not offer investments that are federally insured by the FDIC, so there is a risk of losing principal as
with any other brokerage. Brokerage services are provided to Stash Clients by Apex Clearing Corporation, an SEC registered broker-dealer and member
FINRA/SIPC.
Stash Invest is a registered broker-dealer with the Securities Exchange Commission (SEC). The company is also a member of the
Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).
Stash Invest's affiliation with the latter three agencies means they comply with all the rules and regulations governing the investing industry and
pledge to do business with customers in a legal and ethical manner. The main risk for an investor is if Stash Invest fails and must liquidate its
assets. However, SIPC insurance guarantees investors' accounts up to $500,000 (including up to $250,000 in cash).
Stash Invest Promotion
Get $20 free stock when you open a new account.
Open Stash Account
Stash Invest Complaints, BBB Rating
A search of the Better Business Bureau website shows that the broker does
have a record there.
Stash Invest BBB rating is F - the lowest available at Better Business Bureau. There are 57 reviews
for the broker. The website also has 196 complaints posted in the last 3 years. Considering
that the company has at least 3.5 million users, these numbers are very low.
Is Stash Legitimate Conclusion
There are more options and slightly more transparency available with Stash than is available with Acorns. It
is a compromise in that users do not have the purchasing freedom that comes with Ally Invest (review). Stash also does not
offer the same number of active reminders to invest, which makes it easy for casual investors to leave it by the wayside inadvertently.
Stash is an early robo-advisor planted firmly in the middle ground between Acorns and Firstrade.
Stash is ideal for young investors who want to throw a cinnamon latte’s worth of cash into an investment portfolio every once in a while, and are
curious about where their money is going. However, the combination of the fees and the deposit strategy suggest that it is a place for saving money
for a rainy day, not users’ golden years.
Stash Invest Overview
Do you want to start investing but don’t think you have a large enough pile of cash stashed away to afford enough stocks to create a diversified portfolio? Or maybe you do but the commissions from buying dozens of different securities eat up too much of your cash. Either way, Stash Invest has a solution for you. Their mission is to make diversified investing easier and cost effective for people with smaller savings by allowing you to invest in fractional shares. This article will offer an overview of Stash’s unique platform.
What is Stash?
Stash has carved out a niche for itself in the large brokerage industry by making diversified investing achievable and cost-effective regardless of the size of your nest egg through fractional share investing. For example, let’s say you’ve worked hard to stash away $1,000 to start a portfolio. You know that you need at least a dozen different stocks in your portfolio to mitigate a lot of the company-specific risks, which means you have roughly $83 to invest in each stock.
If you wanted to invest in companies like Apple or Tesla, whose stock prices are approaching $200 a share, you’d be out of luck… and forget about buying a share of Amazon stock, which is currently approaching $2,000. Stash solves this dilemma by allowing you to invest in a fractional amount of these companies’ shares, so you can invest $83 in each of these three stocks. In fact, Stash will let you buy in as little as $5 increments if you want.
Investment Choices
On the downside, because Stash is so accommodating to smaller investments it wouldn’t be practical
for them to offer every public stock on their platform. For example, if you decided to buy 0.2%
of a share of a stock most people have never heard of, Stash might have a hard time finding others
to buy the rest of the share. As such, Stash currently only allows you to invest in roughly
3319 different U.S. stocks and ETFs.
Personalized Stash Portfolios
Stash recognizes that everyone has a different approach to investing, which is why they give you the option of investing on your own, where you do your own research and choose investments, or you can use their free personalized portfolio tool to help you build your ideal portfolio. This tool will ask you a series of questions about your financial situation, goals, and risk appetite, and then recommend a portfolio of stocks and ETFs that fit your needs. The tool is also fun to play around with to see how changing your answers impacts Stash’s recommended portfolio.
Educational Tools
Stash is also good for beginners because they have their own learning center, called “Stash Learn”, which has self-help style articles that are easy for even the newest beginners to follow. They also offer more in depth articles and discussions on financial topics to provide continued engagement and learning after you’ve mastered the basics of investing.
Stash Account Types
Stash doesn’t offer the full suite of different account types that you’ll find with the larger brokers, like TD Ameritrade, but they do offer the most popular accounts. These include your standard taxable account, Traditional and Roth IRAs, and custodial accounts.
Stash Review Summary
Stash’s investment options are somewhat limited in scope, and as such we wouldn’t recommend their account to professional investors that are looking for a wide range of investment choices and security types to include in their portfolios. On the flip side, if you are part of Stash’s target market - you want to build a diversified portfolio with a small amount of cash without breaking the bank - then we would recommend you give Stash a try.
Stash Invest Promotion
Get $20 free stock when you open a new account.
Open Stash Account
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