The market volatility spurred by the COVID-19 pandemic has caused young investors to seek out financial planning advice, according to Fidelity Investments, and its latest mobile app is designed to capture that potential clientele.
For Fidelity, the larger goal is to establish long-term relationships with these prospects and move conversations toward proprietary products and services, according to the company’s vice president of young investors Kelly Lannan.
The mobile app is called Fidelity Spire, and its purpose is to attract young adults to plan, save, invest and set short- and long-term financial goals, according to Fidelity’s announcement Wednesday. The app, available on Apple iOs and Android, is free for any user and does not require users to be Fidelity customers.
“Fidelity Spire is not meant to be a one-time interaction,” she said. “The app has an educational hub with content related to those longer term goals, such as retirement, because even though it does feel far off to younger people, that doesn't mean they shouldn't be thinking about those things now. So the app can be that first step to developing a lifetime relationship with these clients.”
Once registered with the app, the interface walks the user through establishing, prioritizing and tracking their financial goals. For young adults interested in focusing on their short-term goals, the app will prompt the user to consider the Fidelity Cash Management tool, with no fees or minimum balances, as an option. For long-term goals, users can decide whether to invest on their own, or enroll with the robo-adviser, Fidelity Go.
The app can also serve as a tool for advisers to use with an investor that is interested in advancing the conversation from robo-adviser to human adviser.
Fidelity declined to disclose how many users are currently using the app.
“While the app isn’t meant to replace a human adviser, for a lot of young adults speaking with a professional may be intimidating for their first step into financial services,” Lannan said. “Fidelity Spire can be the first step for young investors to help them feel more confident about their money and when they’re ready, they can explore other Fidelity offerings.”
Some of Fidelity’s competitors have already adopted a similar strategy. Personal Capital, for one, has offered a free dashboard for investors to sync their accounts and get a single view of their cash, investments and liabilities, and to receive basic financial planning around retirement or other savings goals. In 2018, Wealthfront made its financial planning software free for users on its mobile app.
Fidelity’s robo-adviser is available via the app for any user that opts to engage, with no account opening minimums and a $3 per month subscription-based price for accounts with a balance of $10,000 to $49,9993. For accounts with a balance of less than $10,000, Fidelity Go will be free of any advisory fees.
Moving forward, Fidelity will continue to build out enhancements to the app. Specifically, Lannan said clients are already asking for trading to be integrated.
“We purposely wanted to lead first with financial literacy to ensure that people are educated enough when it comes to investing in trading before they actually take that first step,” Lannan said. “By leading with education first and then trading, we think that's a really powerful way to ensure that we're being very responsible about the users who are coming to the app.”
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