About a year ago, I set out to find a platform I could open a custodial account for my child to invest in stocks. I was searching for a platform where he would be able to log in and check his account, and also where fractional shares are available.
Loved offers this ability.
What Is Loved?
Loved is technically an investment advisor firm that provides UTMA accounts. It operates with apps on the Apple App Store, Google Play store, and a website.
UTMA accounts stand for Uniform Transfers to Minors Act. It applies to gifts from parents, relatives, etc to minors and how they are treated.
It is a Startup
It is a startup, and is actively growing it's team. The founder is David Hannes and it has received 1 million of seed funding from Pivot North Capital.
I personally like supporting a startup and seeing how the product evolves as they grow. Given that it is a FinTech company and a fiduciary, I have some concerns about how that could all play out in the future.
For instance: if the company doesn't receive further rounds of funding, and is not making enough money from order flow, what happens? I imagine they will have to liquidate all the positions and return the money. Or perhaps all the users will then have their same shares but just managed by Apex Clearing Corporation.
For a serious savings account for my children, I would feel more confident if they had a track record.
The interface is very easy to use. It does not delve into being a trading app with realtime stock updates and put too much focus on the minutia.
There is a goals feature that includes an automatic savings plan to meet said goal. Default options are things like college, first car, and coding classes.
If you go all the way through the menu of setting up a goal, it seems that the whole thing is just an automatic bi-weekly savings program going into a specific fund. Not really what I would be looking for in goal setting honestly.
I am not sure if automatic deductions are really an appropriate tool to have for a custodial account. Though if you are saving for college, and they can watch how the money grows over time, the nature of compound interest and savings could be more real to them then.
Send and Receive
This is pretty cool. You can send people money or shares of stock.
You can schedule to send birthday presents. Though I do not see a way to add in other events to schedule for.
I think this is a feature that really could be nice if it were further developed.
The trading interface is a bit clunky. It takes a bit of time for the trades to clear. There really is not much information to do research from.
Not Much in the Way of Financial Education
Though the app is about "investing and learning together," there is not much of a platform to do so from.
This would be a great opportunity to have tiers of financial data available that gets unlocked after certain achievements are met. Allowing the users to learn and become familiar with financials as they go.
It shows the market cap, current yield, number of employees, CEO, city of headquarters. Which some of this data keeps it a little more fun and lighter.
But it misses on educating about how buying a stock is buying a piece of a company with its earnings and future prospects of earnings.
There is a market news section that is glitching out, it just displays an article about a February sale at REI over and over again. I will admit. I checked out the sale.
The interface is nice for children.
The default graph when looking at a security shows a projected growth into the future. Really nailing in the value of compound growth. Though having specific numbers may set false hopes and does not seem to have any disclosures of past performance not indicating future results.
The ability to send and receive gifts seems like it could be a cool way to educate kids and being the crazy uncle who always gives their nieces and nephews stocks for their birthdays along with a suuper fun explanation of what the stock market is.
Wrapping it Up
The startup nature of the app makes it less than ideal to use for a serious college savings account for children.
There is definitely promise to this app, it seems like if there are improvements and they really double down on making it a platform to create financial education for children then there is a solid niche that is mostly unfilled.
I hope the company continues to evolve their app and is able to build it into something that can truly help with educating the next generation financially.