The Quarterly Review: Acorns is digging deep into research to inform product development and growth
- Seth Wunder, President and CFO at Acorns dives into how the firm is putting its most recent consumer research to work in building and marketing Acorns products.
- Acorns' strategy is a combination of providing lateral support through financial education as well as evolving product mixes through acquisition of firms like GoHenry.
Notes from the desk: Welcome to this month’s Quarterly Review, a series where I dive into what executives from some of the best brands in financial services are focusing on in this quarter, as well as how they are planning to achieve their goals. It’s a chance for the industry to learn about what goes on behind an FI’s four walls and how leadership manages their priorities.
But that’s not all: a review implies no mandates, a check in. So stay tuned next quarter to learn whether the executive achieves his plans and translates theory into reality.
In this edition we will
focus on Seth Wunder,
President and CFO
at Acorns.
In a world where investing is being encouraged by UX that delivers the same buzz as slot machines and social media, how is Acorns, with its acorns to oaks messaging managing to build and maintain engagement with its customers?
Acorns’ answer to this is methodical, like its approach to investing. Having just published the annual Acorns Money Matters Report, which takes the pulse of American consumers on topics related to financial health, Wunder is now focused on bringing these insights into marketing and product development for offerings like the Acorns Mighty Oak Card which was launched last year.
Dive into how Acorns is connecting the roots of research to reap the fruits of customer engagement through acquisition and customer-centric messaging.
The focus: Research, marketing and all things product
Wunder: Our focus this quarter continues to be on offering education and financial empowerment tools that meet our customers where they are in life, including:
- Publishing our annual Acorns Money Matters Report showcasing how Americans feel about their financial wellbeing to help us understand consumer needs.
- Continuing to offer insightful advice and tips on investing and savings through our education offering, Acorns Learn.
- Highlighting the benefits of the Mighty Oak Debit Card, which offers Real-Time Round-Ups, so every time a customer swipes their card we round up to the nearest dollar, and invest the spare change.
- Making continual improvements to our products and educational offerings for our customers.
At Acorns, we know money is an emotional topic. So beginning in 2017, Acorns started checking in with Americans to gain insight into the state of their financial situation. The insights from our surveys – highlighting the real concerns, hopes, and dreams of everyday people – help us continue to keep the customer centered in our work toward making it easy and accessible for people to invest and save every day for their futures. This year, we focused on financial wellbeing and the factors that impact how people feel about their financial security.
Know your customers’ concerns: According to the 2024 Acorns Money Matters Report,* there’s a growing unease in Americans’ sense of financial security — so much so that nearly 1 in 4 people fear experiencing homelessness due to their financial situation. Cost of living and inflation has topped the list of concerns, followed by debt, retirement, interest and mortgage rates, and lack of savings. Financial worries have also been compounded by headlines about global turmoil and economic pressures. What’s more, we also see the clear effects that these concerns can have on Americans’ sense of financial wellbeing:
- More than half of the people we surveyed expressed concerns about the effect macro events like global war and conflict have on their financial security.
- Only 35% think they would be more financially secure next year than they are now.
- With increased cost of living and inflation, approximately a third of Gen Z and Millennials (29% and 32% respectively) responded that they fear their financial situation could lead to experiencing homelessness, which is nearly three times more than Boomers and older respondents (11%).
Plan of action
- Marrying consumer expectations with product development: It is clear from these results, finances can instill fear and hopelessness among consumers, but there are signs of hope. Acorns customers feel more financially secure year-over-year as compared to the total U.S. market (34% of customers vs. 25% of the wider population) indicating Acorns fills a gap and lifts financial wellbeing. We are working to shift the paradigm when it comes to how we think about personal finances and investing.
Recognizing that people need hope, the Acorns Way is an approach to personal finance that is more human—that puts people first. Beginning with small steps like investing spare change and micro investing. While other finance apps promote instant gratification, Acorns is all about slow and responsible growth over the long term. We’re proud to say that through our suite of tools, everyday Americans have invested over $20 billion with Acorns, much of it in spare change, and we’re excited to keep the momentum going. - Countering the lack of financial literacy: Additionally, with lack of financial literacy and education seemingly a root cause of the fear of personal finances according to the Money Matters Report, Acorns is solving this problem with built-in education and accessibility to the responsible tools of wealth-making.
Acorns integrates financial literacy education and empowerment through our app along with a full suite of saving and investing tools. The Acorns app bundles products, tools, and education into 3 curated subscription tiers that help everyday people and families save and invest for the long term. - Broadening the product mix through acquisition: Rooted in our mission to look after the financial best interests of the up-and-coming, Acorns acquired a leader in financial education for 6-18 year olds, GoHenry, and introduced a premium tier focused on family, including access to GoHenry by Acorns and Acorns Early, which allows parents, family, and friends to easily invest in a child’s future from birth.
GoHenry is a cornerstone of education-driven finance, helping Acorns accelerate our roadmap, and expand financial wellness to the kids and teen markets. In the UK where GoHenry was founded, 92% of parents say their children are more money confident since joining GoHenry, and 1 in 5 kids ages 10-12 have a GoHenry card. The next step is bringing this impact to the US to help ensure children are equipped and confident in their finances as they age. - Respond to consumer demands: While our Money Matters Report found that 54% of Americans have an emergency fund, the average Mighty Oak Card customer put an average of $750 into their Emergency Funds and are projected to save over $1,000 in 4 months versus more than half of Americans who wouldn’t be able to cover a $1,000 emergency expense**. So, we are also continuing to build products that make saving easier, and respond to consumer trends like Gen Z’s preference for debit cards and desire to live within their means and avoid fees.
Go see some relevant disclosures.
