Is Stash Safe?
Stash is a relatively new broker and has become very popular recently. Stash owes its popularity to its straightforward approach to investing, automated trading, stock-back spending features, and easy-to-use mobile application.
Is Stash safe to use, and is the broker insured? Is Stash a scam? The short answer is that Stash is a trustworthy broker.
Continue reading to see why Stash is a safe place to invest.
Is Stash a Scam?
One of the quickest ways to see if a broker is reputable is to look at the regulatory bodies it is registered with.
Stash Investments LLC and the broker’s clearing firm, Apex Clearing, are registered and licensed by the primary regulatory organizations in the United States.
The Financial Industry Regulatory Authority (FINRA) and the U.S. Securities and Exchange Commission (SEC) oversee all of Stash Invest’s activities. Not only does the broker have to meet industry standards, but it must maintain those standards to pass regular audits and inspections.
To get the most current licensure data, you may check FINRA’s Broker Check website here.
Is Stash Legitimate?
A broker’s clearing firm is another place we look to determine its reliability. In Stash’s case, Apex Clearing takes care of facilitating trades. In addition to clearing transactions, Apex is also a custodian for all Stash customer brokerage accounts. That means customers are protected by insurance policies held by both Stash and Apex.
Is Stash Insured?
Regarding the security of your money and investments, Stash Invest provides two forms of insurance. There is FDIC and SIPC; the one that covers you will depend on your Stash services.
SIPC protects the securities (and some cash) in your investing account. The purpose of SIPC is to safeguard investors against broker-side problems.
In the unlikely event of Stash becoming unstable or going out of business,
SIPC insurance would
replace lost assets up to $500,000. Half of the SIPC coverage amount can also be used for uninvested
cash in the account.
FDIC covers cash balances in the Stash Bank account and funds swept into partner banks. Each participating bank has a $250,000 limit.
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Stash BBB Reviews
Stash is not currently rated by the Better Business Bureau (BBB) due to the BBB reevaluating its
rating. Nor is it accredited.
Stash BBB Ratings
There are several reasons for a business to receive an NR from the BBB, but in Stash’s case, it is most likely because the BBB is looking into how Stash handles customer complaints. We expect the rating to be updated soon.
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Stash BBB Complaints
There are several complaints about Stash on the BBB website, most of which relate to Stash customer support and difficulties closing accounts. Stash is good about responding to those complaints (98% response rate), but the number of complaints can seem alarming at first glance.
With nearly 950 complaints in the past three years, it would make sense to think something may be wrong, but we don’t think so. Stash has over 6 million customers and manages over $3 billion. From that perspective, 950 complaints over several years begin to look relatively insignificant.
Stash Review
Now that we have established that Stash is not a scam, you might wonder how good of a broker it is for investing.
Stash provides a simplified approach to investing and is a great option for traders looking to build long-term, balanced portfolios using stocks and ETFs.
Stash provides a good selection of account types and has a premium subscription for investors looking to unlock better rates and features (more details below).
Investment Approach
The tools available at Stash are all geared towards the broker’s investing approach. The main idea is to give investors the insight they need to build professional-level balanced portfolios suitable for long-term investment strategies.
Stash offers two different portfolio styles. One is self-directed, and the other is automated, offering features like auto-rebalancing, risk level optimization, and recurring deposits.
Available Investment Vehicles
US-listed stocks and ETFs will be the building blocks of whichever portfolio type you decide to use.
Stash categorizes investment vehicles (stocks and ETFs) into specific groups, making it easier to get a broader view of the overall markets. Whether you are looking for bonds, commodities, consumer staples, healthcare, industrials, global exposure, or anything else, Stash makes it very easy to narrow your search. You can browse securities based on the sector, category, or theme they belong to.
If you know the name of the security you would like to invest in, you can also search for any U.S.-listed stock or ETF directly by name.
Portfolio Management
All the available securities at Stash can be bought and sold as fractional shares, allowing you to finetune your strategy and control the percentages and weighting of your chosen investments within your portfolio.
If you want to manage your own portfolio, the categories, and curated collections are certainly helpful. Selecting securities and entering your order is also straightforward. All that is needed is to choose a dollar amount for your trade and submit your transaction request.
If you want to use the automated portfolio approach, you must set your preferred level of risk and answer a few questions. After that, Stash creates a portfolio for you that rebalances regularly. To add to your Smart Portfolio, you only need to add a preferred dollar amount.
Subscription Tiers
Stash Invest is a subscription-based broker offering two levels of service: Stash Growth and Stash+. Both options have great features, but Stash+ broadens the range of choices available to you.
Here is a quick rundown of the features and services you can expect from each subscription level.
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Available Account Types
To complement its long-term investment approach, Stash offers useful account types designed to help investors plan for the future while keeping up with their day-to-day investment and cash management needs.
At Stash, you can open investing, banking, custodial brokerage management, and retirement accounts.
Ease of Use
When it comes to ease of use, Stash is among the most straightforward brokers to use and understand. If you are looking for simplicity, Stash is well worth your consideration.
Whether researching stocks and potential investment opportunities, building your own balanced portfolio, setting up a retirement plan, or creating a nest egg for an underage investor, the required tools are simple and easy to use.
Cash Management Features
Cash management at Stash comes with many attractive features. You can access them through a Stash Bank account.
Stash Banking is hosted by Stride Bank, and funds are FDIC insured. With the bank account comes one of Stash's most interesting cash management features: the stock-back debit card.
Stash credits your brokerage account with fractional stock each time the card is used. The amount of stock you get depends on your subscription level (0.125% and 1% for Stash Growth and Stash+, respectively).
The stock is determined by where you use your card. When you shop at your favorite stores, stock from those companies shows up in your brokerage account. If, however, you want to assign a specific company for your stock-back rewards, that is also possible.
Research Tools
If research tools are vital for you, it is helpful to note that Stash Growth doesn’t offer much in that department. You can access an ‘About’ section for each security, and there is a news feed for relevant news.
For analyst reports, market insights, and professional opinions, you must subscribe to Stash+. Doing so unlocks a newsletter/report that provides some useful information.
If learning content is what you are looking for, Stash does provide a blog-like ‘Learn’ section containing educational articles and walkthroughs. Most of the learning content is geared toward newer investors, however.
Additional Tools and Services (Partnerships)
In addition to Stash’s brokerage and banking services, there are several ‘extras’ that investors can take advantage of. Stash customers have access to life insurance (Bestow), car insurance (Jerry.ai), and home insurance (Lemonade). LendingTree loans are also available, and there are several loan types available.
Find a Financial Advisor
If you are looking for a professional money management service in your area, you can
find a Financial Advisor on the Wiser Advisor
(or read
Wiser Advisor review).
Visit Wiser Advisor
Stash Pros
There are many things to like about Stash Invest, and it can be an excellent choice for investors aligned with the broker’s philosophy.
Stash Invest is good for investors who value the following:
- Access to U.S.-listed stocks and ETFs
- Convenient mobile application
- Professionally managed portfolio
- Automated trading and rebalancing
- Regular market updates and insight
- Brokerage, retirement, custodial, banking, and insurance options in one account
- Stock-back spending card, generous referral program, and low fees
Stash Cons
Some investors may not like the following:
- Monthly subscription costs to use Stash services
- Lack of ‘advanced’ securities and leveraged investment vehicles
- Simplistic approach to technical analysis
- Little control over precise fill prices when trading
Stash Review Summary & Recommendation
All in all, we think investors looking for a simple solution for long-term, automated portfolio management, some self-directed investing, and a passive stock-back investment feature would be right at home at Stash Invest. Custodial and retirement accounts, insurance partners, and loans provide even more reasons for investors to consider Stash as their one-stop-shop broker and personal finance app.
We would not recommend Stash to investors who depend on pro-level tools like advanced charting, fast order execution, optimized fill accuracy, and advanced order entry. In short, if you are an active trader, or an investor interested in options, Forex, or futures, Stash is not your best option.
Updated on 10/4/2024.
I work in investment analytics and have been investing in the market since I was in high school. I enjoy anything that involves lots of strategy (i.e. a good game of chess), which is why I was naturally drawn to investing and researching companies. Outside of investing, I’m a big fan of the outdoors. In summer, you’re most likely to find me kayaking, camping, and hiking in the mountains.
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