New banks

With no-fee ETFs, is SoFi a challenger bank now?

  • SoFi files plans for a series of no-fee ETF.
  • The consumer lender is blurring the lines between lender and bank.
With no-fee ETFs, is SoFi a challenger bank now?

SoFi plans to launch the industry’s first no fee exchange traded funds.

The consumer lender filed a series of no-fee ETFs with the SEC. These investment products won’t charge investors a management fee, at least in the first year of operation.

What’s happening here:  The investment industry continues to introduce low fee investment products. Some ETF families and brokers like Vanguard and Schwab offer their investors fee waivers on certain investment products. Those are only available to brokerage customers. SoFi’s ETFs would be available freely to everyone.

SoFi’s ETFs are also designed with millennial investors in mind, including funds with 500 and 50 constituents along with the SoFi Gig Economy ETF.

Tearsheet’s Take: Most challenger banks launch with a basic current account and then roll out more banking, lending, and investing products as they mature. SoFi’s playbook began in the reverse — it went to market with student loan refinancing and is now moving into investing and investment products with the launch of no-fee ETFs.

In a way, SoFi and the other challenger banks are headed in the same direction: providing their users with full access to financial products through a single interface.

SoFi’s marketing has focused on membership benefits, investing a lot in customer acquisition up front. With this tighter relationship, SoFi believes it can successfully introduce other financial products to its members.

New banks, Podcasts

The challenges and opportunities in moving from DTC into enterprise with Moven’s CEO Marek Forysiak

  • Moven was an early pioneer in consumer digital banking.
  • Over the past few years, the firm has moved into providing enterprise technology.
Zack Miller | October 15, 2019
New banks

Research: Seven transformative shifts in US retail banking

  • The banking industry is undergoing a lot of change.
  • By addressing the growing pressures, banks can stay relevant in the new environment.
Zoe Murphy | October 14, 2019
New banks

Credit Karma to jump into the high yield savings account market

  • Almost 100 million Americans use Credit Karma to help manage their debt.
  • Now, the firm is launching its own free high yield savings account.
Zoe Murphy | October 04, 2019
New banks

New challenger bank Dave now worth $1 billion after recent investment

  • With an investment from Norwest, Dave hits unicorn valuation.
  • The company still needs to prove it can move PFM users to become banking customers.
Zoe Murphy | October 01, 2019
New banks

Revolut chooses Visa as lead issuing partner for its international expansion

  • The challenger bank has global ambitions.
  • Visa will work with Revolut to expand to new geographies and markets.
Zachary Miller | September 30, 2019
More Articles