Fidelity launches brokerage account aimed at 13- to 17-year-olds

[Lobster Roll]

As somebody who has spoken to high school econ classes about financial literacy in the past, some of the takes in this thread are something else. If you want to see this as a sky-is-falling situation, then that's fine. You can apply the same logic to giving a teenager access to a car, honestly. However, people under the age of 18 should absolutely be familiarized with investing. Investing, budgeting, paying your taxes, etc. is all stuff that is glossed over in high school, so I'm in full support of giving high school kids an avenue into learning how they can invest their money for the future.

And let's say the sky is falling and a 16-year-old burns their entire checking account with $500 because they're being reckless with investing. That's a far better lesson & outcome than a 25-year-old chasing trends on /r/wallstreetbets and throwing away $10,000.

 

[thewienke]

If nothing else, there's a lot of very low risk index funds and such that would be great for young people to throw money into at a young age.

At that point, it's not that much different from when they tried to get kids to sign up for savings accounts back in the 90s when I was like 12.

 

[Tater]

My son is too young for this, but I could see giving him some money to play around with in the market. I want him to learn to handle money while the stakes are still low. No taxes unless you're making more than $12k/year, so day trading could make more sense, but we'd be having a loooong talk about the impact of taxes.

My family didn't have a lot of money when I was a kid, so I internalized that and became an oversaver. It's been hard to learn to let go and invest it, I want my son to be more comfortable investing (but not speculating) on things.

 

[Euphoria]

They don't understand and they don't do it. They see the market as a giant casino.

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That would be a real shame. 401k, pensions, you name it, all tied up in this same market. I would have loved having something like this 20 years ago.

My kid is really smart. I'm now tempted for her next birthday when she turns 13 to move $2-$3k from my fidelity account over to her on one of these new accounts and making this a thing we regularly do together.

Im looking forward to this now.

 

[Sho_Nuff82]

On the surface seems dystopian, but saving and investing is a skill I wish I'd had younger. As long as it *requires* parental permission for the app to sign up, there's no downside to having your $200-$1000 piggy bank savings from your HS job in an investment account, when interest rates are as laughable as they are.

 

[Netherscourge]

How about just getting your kids a Retirement or College account?

 

[Forsaken82]

Cool, gambling for children.

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Kids should know a thing or two about investments early on...

 

[Zachary_Games]

This is great. I don't have kids yet, but I will absolutely be teaching them how to invest, the importance of finance, time value of money, etc., etc. Of course I won't let them make trades without my parental consent, so hopefully the app has strong parental tools from the jump.

 

[Euphoria]

As somebody who has spoken to high school econ classes about financial literacy in the past, some of the takes in this thread are something else. If you want to see this as a sky-is-falling situation, then that's fine. You can apply the same logic to giving a teenager access to a car, honestly. However, people under the age of 18 should absolutely be familiarized with investing. Investing, budgeting, paying your taxes, etc. is all stuff that is glossed over in high school, so I'm in full support of giving high school kids an avenue into learning how they can invest their money for the future.

And let's say the sky is falling and a 16-year-old burns their entire checking account with $500 because they're being reckless with investing. That's a far better lesson & outcome than a 25-year-old chasing trends on /r/wallstreetbets and throwing away $10,000.

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Kind of touched on it but it's also far better than letting that 18 year old get their first job and paychecks and stupidly financing a $30-$40k vehicle they shouldn't have and holding themselves back.

I see that all the time. Hell, that doesn't even stop at 18 lol.

 

[PSI Rockin’ Ω]

Agreed that this is a good thing for those like me who have been preaching financial responsibility to their kids already. My kids have some savings sitting in an account; I have been teaching them about investing with no way for them to actually do it. If this thing can be set up so that I have to approve trades before they are made, it'll be a perfect vehicle for getting them started. They already know to heavily prefer index funds. The earlier they get started, the better!

 

[GoldenEye 007]

Starting an index fund for them earlier than usual and teaching about that? Sure. A brokerage account meant seemingly for frequent trading? Nah, won't be touching that really.

 

[Lobster Roll]

Kind of touched on it but it's also far better than letting that 18 year old get their first job and paychecks and stupidly financing a $30-$40k vehicle they shouldn't have and holding themselves back.

I see that all the time. Hell, that doesn't even stop at 18 lol.

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Exactly. The current financial planning blueprint in the US is to over-leverage yourself the moment you get paid and to live outside of your means via credit. People want a car they love, a house they love, and goods & services they love without the means to afford all of them at once.

 

[Ether_Snake]

Their own teams miss on emerging trends identified among teenagers/young adults so they want to capitalize on it.

 

[Chikor]

Individually buying and selling stocks is not something most people should get into, and it's bad enough we have so much Wall Street propaganda on TV and movies lying to people about how easy it is to get rich doing that, but now gonna let wall street into high schools to teach kids that directly?
Yeah, I am definitely not on board with any of this.

 

[winjet81]

This is a great idea.

I grew up in a family where you did not talk about finances... and I was very ineffective with my money, spending stupidly, not saving enough and only getting into the investments game when I was well into my 30s.

My wife and I will damn well make sure our kids are financially aware when they are teenagers... this type of investment tool is just a part of that education, IMO.

 

[Sho_Nuff82]

How about just getting your kids a Retirement or College account?

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Both are still investment accounts with some assumed risk. As is a standard 401k.

It is 100% smarter to have your kid learn the lesson of overextending themselves with an account limited by their savings, vs giving them a credit card.

 

[GoldenEye 007]

Both are still investment accounts with some assumed risk. As is a standard 401k.

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The risk of those types of accounts while present, are just a tad different than individual stock trading and other similar things.

 

[Sho_Nuff82]

The risk of those types of accounts while present, are just a tad different than individual stock trading and other similar things.

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I agree, but they're not mutually exclusive. You can give your kid a secure windfall for college by starting a college fund when they're in the womb, and you can also teach them how to stop living paycheck to paycheck before they leave the house.

I also come from a family that never openly discussed finances, and I definitely want to impart better skills sooner on my kids.

 

[MechaMarmaset]

This is great. I wish they had opportunities like this when I was a kid. We had classes teaching us about the stock market in 7th grade, but could only use the fake online portfolios. It would have been cool to be able to actually invest in an ETF as a teen and jump start savings. I remember wanting to buy google when I was 16 but my parents didn't understand stocks and you couldn't get a brokerage account as a 16-year-old.

 

[PSI Rockin’ Ω]

On a related note, my fourth-grade daughter had a homework assignment earlier this year to go through a kids' program about basic financial literacy. I can't find it, but I think it was a corporate product of Wells Fargo or something similar. Very cartoony. I was a bit suspicious, but I watched it all and found it to have some really sensible information. I was glad the schools were promoting this kind of education. If I find the link I'll post it.

 

[GoldenEye 007]

I agree, but they're not mutually exclusive. You can give your kid a secure windfall for college by starting a college fund when they're in the womb, and you can also teach them how to stop living paycheck to paycheck before they leave the house.

I also come from a family that never openly discussed finances, and I definitely want to impart better skills sooner on my kids.

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Yeah for sure. All I'm saying is that the type of thing you mentioned such as an education account or another diversified fund probably does make a lot of sense to start early and educate a kid along the way.

But basically day trading seems a bit much at such a young age. Teaching about it, sure. But actively giving to tools for a kid to do that seems a bit much to me. But hey, that's just me. Parents will for sure do what they see fit at the end of the day.

 

[cgpartlow]

The earlier you invest the better, but they should be investing with mutual funds not single stocks like a day trader.

 

[Septimus Prime]

Individually buying and selling stocks is not something most people should get into, and it's bad enough we have so much Wall Street propaganda on TV and movies lying to people about how easy it is to get rich doing that, but now gonna let wall street into high schools to teach kids that directly?
Yeah, I am definitely not on board with any of this.

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It's better to let kids give it a try without much risk so they can understand how it works and judge whether it's something they want to do "for real" with their own money later. Worst case here is they lose their small investment allowance from their parents.

 

[Petruccis Biceps]

They should only be allowed to invest in ETFs tbh

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Yeah, at the very least it wouldn't be as risky as trading regular stocks.

I think retirement planning should be taught early on. Getting a jump start on even a small investment(if possible) in a growth ETF will compound and accumulate greatly over time.

 

[Septimus Prime]

They should only be allowed to invest in ETFs tbh

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I disagree. This should be a separate thing that they should do, too, but I still think it's better for them to experience the more volatile investing on their own.

 

[Chikor]

It's better to let kids give it a try without much risk so they can understand how it works and judge whether it's something they want to do "for real" with their own money later. Worst case here is they lose their small investment allowance from their parents.

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I seriously doubt Fidelity is going to teach kids that short term stock picking is too risky for most people.
In fact, I am pretty sure they will do their best to teach them the opposite.

 

[Dark Ninja]

Do they have to pay taxes?....... if not 🤔

 

[BobLoblaw]

Damn. Little Timmy owns 10 shares of Tesla?

 

[Cat Party]

Do they have to pay taxes?....... if not 🤔

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Is your 13-17 year old about to get a $50k "allowance"?

 

[Septimus Prime]

I seriously doubt Fidelity is going to teach kids that short term stock picking is too risky for most people.
In fact, I am pretty sure they will do their best to teach them the opposite.

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I think experience will teach. Otherwise, how will they know it is or isn't for them?

 

[CitizenVectron]

Cool, gambling for children.

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Maybe they will have loot boxes, where you pay money and then you get random stocks. "Aw sick, I got a legendary stock, Tesla!"

 

[Chikor]

I think experience will teach. Otherwise, how will they know it is or isn't for them?

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So I generally don't think we need to push more Americans to individually invest in the stock market, quite the opposite actually.
But if I was trying to teach the pros and cons of individually picking stocks in a neutral way, I would most certainly not let Wall Street do that.

Fidelity is directly incentivized to get as many Americans to have a brokerage account, they are not incentivized to get Americans to understand wall street better, in fact, they make more money the more ignorant the average American is about those issues.

 

[Septimus Prime]

So I generally don't think we need to push more Americans to individually invest in the stock market, quite the opposite actually.
But if I was trying to teach the pros and cons of individually picking stocks in a neutral way, I would most certainly not let Wall Street do that.

Fidelity is directly incentivized to get as many Americans to have a brokerage account, they are not incentivized to get Americans to understand wall street better, in fact, they make more money the more ignorant the average American is about those issues.

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I still don't agree, but I get your point. Fidelity also benefiting from this is not inherently bad on its own.

 

[AtomLung]

Custodial accounts are already a thing. Seems more designed to rope in potential meme traders.

 

[davepoobond]

I'm all for a redesign of their app if it makes it easier to use. This stuff Can be a bit cumbersome/confusing.

also, I'm very confused at the implication that investing is bad.

 

[16bitnova]

I wish I would've had something like this around that age. One of my biggest regrets was not learning how to invest earlier.

 

[SquirrelSr]

Wait. Fidelity does fractional shares? How did I not know that?

 

[GoldenEye 007]

I'm all for a redesign of their app if it makes it easier to use. This stuff Can be a bit cumbersome/confusing.

also, I'm very confused at the implication that investing is bad.

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I don't think that's the prevailing thought? Just that investing in general is good to know and even do earlier, but maybe essentially day trading at such a young age isn't?

 

[Sensei]

Wait. Fidelity does fractional shares? How did I not know that?

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only on the mobile app if i remember correctly

 

[SquirrelSr]

only on the mobile app if i remember correctly

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Is the mobile app is connected to the regular Fidelity account?

 

[RedNalgene]

This is a great idea. What's the alternative for these kids if not a brokerage account that they can control? A savings account making 0.5%? Shove it in a piggy bank? Just like a bank account, this should be assisted by parents, and shouldn't be the kids life savings. If they want to "play" with some of their hard earned savings by buying some meme stocks and they lose it, they learn a lesson. Maybe then they ask their parents for advise on an ETF. I really don't see the problem with this, and definitely wouldn't put it in the category of kids instagram

 

[Guts Of Thor]

This is pretty cool. Wish I had something like this growing up.

 

[Sensei]

Is the mobile app is connected to the regular Fidelity account?

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yep

 

[davepoobond]

I don't think that's the prevailing thought? Just that investing in general is good to know and even do earlier, but maybe essentially day trading at such a young age isn't?

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kids who are day trading would likely not be using a lot of money to begin with. You have to transfer funds from a bank account, so if these kids have money from a job or are given something by their parents for something like investing, I don't see a problem with it.

it depends on how predatory these apps are, it is a bit of a far cry from in-app purchases in mobile games which are obviously predatory, especially to kids/people with gambling problems. There's a big difference though since stocks/funds have an actual value still after they are bought.

 

[Deleted member 4346]

Another example of how we live in a boring dystopia.

 

[SapientWolf]

Cool, gambling for children.

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Fidelity makes you submit like 2 forms and click through 5 warnings just to buy a leveraged ETF in regular account. I seriously doubt that this is the next Robinhood app for teens.

 

[Nax]

If it gets people investing early, good. Schools do a terrible job at preparing youth for the real world finances.

But I hope it's not used to manipulate less savvy users.

 

[Damaniel]

As long as teens are limited to mutual funds, index funds and a limited set of vetted stocks, and offers parental oversight, I think that's perfectly fine. Kids don't need to be trading in Dogecoin or Ethereum though.

 

[bremon]

Parental oversight is ideal, but people acting like these kids are better served by a savings account if they're saving for the longterm are kidding themselves. People referencing "gambling and loot boxes" etc… I mean, sure, some people get fucked in the market investing in high risk stuff, but I think kids taking some losses in ETFs when they're up and down, seeing how the market bounces back still sets them up for success in the long run compared to almost any alternative scenario. Starting at 15 compared to 30 is a huge advantage, as is 13 compared to even 18. Not sure who else these kids are supposed to learn from anyway when school generally fails you and the majority of adults are shit with money and so many parents are financially illiterate anyway.

People who don't invest in the market… the majority of them can probably expect to work until they're dead. I wouldn't wish that on any kids. They have enough to deal with seeing as climate change etc. will devastate their lives even moreso than the rest of us.

 

[Alpheus]

Cool, gambling for children.

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It's just another road sign on the road they started on when they messed with how we predominantly fund college education in this country, entangling the youth in financial straight jackets.

Though bremon brings up good points as to how this can be used to enhance lessons about good financial stewardship, younger me definitely would have appreciated those kinds of lessons.