This Fintech Is Getting Teens Into Investing, But Parents Can Still Keep A Close Eye

In studies conducted by FINRA, just over 50% of adults say finance makes them anxious, with individuals between the ages of 18 and 34 having the highest levels of anxiety.

Why so much stress? In part, the fear and struggles to keep up with widening gaps in the economy.

Education and access are the two factors that may help with narrowing the gap, according to 22-year-old Allan Maman, the co-founder of a youth-focused fintech named Bloom.

Maman acknowledges that progress has been made over the past years amidst the commission-free trading revolution and COVID-19 engagement, but more needs to be done.

“Learning about financial literacy is just as important as most building blocks in education,” he said.

To learn how Maman and his team at Bloom are building products to help the next generation of kids to become financially literate and start building wealth, continue reading.

About: Founded in 2020 by Sonny Mo, Sam Yang, and Maman, Bloom is a YCombinator-backed fintech letting teenagers invest in a safe and educational way.

To date, the firm has secured $3.3 million in seed funds.

“A big part of Bloom is that we want to show kids their money may grow better in an investment account, rather than sitting around and losing to inflation,” Maman told Benzinga. "Our hope is that we can show a teen that their money can potentially grow and work for itself."

Through Bloom’s SIPC insured standard custodial accounts, teens can fractionally invest in stocks and ETFs. Keeping the younger users engaged beyond the basic act of investing are education modules and gifting functionalities.

Maman stressed the difference between Bloom and apps like Robinhood Markets Inc HOOD, “Our app is more educational; we have specific components that teach kids what long-term investing and diversification is,” he said.

“We also have parental controls. If a parent is more risk-averse, and they don’t want their kids making riskier trades, they can disable trades for stocks that are considered high risk,” like GameStop Corporation GME and AMC Entertainment Holdings Inc AMC.

Parental controls will allow parents to intervene and approve trades before they are filled. This, according to Bloom, ensures kids are positioning themselves for long-term growth and lower portfolio volatility, potentially.

Riding The Wave: The pandemic forced people stuck at home to look for ways to engage with the outside world.

This engagement came as the stock market and the tools to which people looked to develop and act on theses – mainly, social media communities. “The unfortunate thing is that people under 18 couldn’t get involved,” Maman said. “Bloom fills that gap.”

With pandemic-era and technology disruptions expected to remain, participation in markets is set to grow, and providing younger generations the tools to learn and act will only help further mend disparities between different age groups and demographics.

“The best way to set up the next generation to become financially literate and build wealth is by having them be hands-on,” the co-founder added in talking about tapping into users’ desire to express themselves via social media and online communities.

“We even have a Discord server with over 2,000 people...and it’s really cool that we’re able to connect, get feedback and fix things in a more streamlined process,” Maman said.

Going Forward: “Bloom’s mission is to empower the next generation to become financially literate and therefore build wealth. There’s no reason why we can’t build all these tools to help the next generation do this,” he noted.

One year from now, Maman said his company is looking to exit beta and add users, update education, as well as add point or cash-back offers that can be redeemed at listed company’s like Starbucks Corporation SBUX.

“We’re available on TestFlight, through Apple Inc’s AAPL beta testing program and then, we’ll be rolling out a public launch over the next few weeks,” he noted. “It’s just the beginning.”