Shlomo Benartzi to chair Acorns behavioral economics committee

Shlomo Benartzi, a well-known behavioral economist and professor at UCLA Anderson School of Management, is joining Acorns, a digital advice startup best known for its micro-investing service, to head a new project to build products that help people save and invest. Acorns' Money Lab initiative will bring together a network of leading behavioral scientists to​ "increase the financial well-being of the up and coming in America," according to a statement. The company said 25 universities have already submitted ideas to Money Lab for field experiments focused on reducing consumer spending. Mr. Benartzi will serve as chair of Acorns' behavioral economics committee. "I've spent my entire career trying to answer a simple question: How can we get everyone to make better financial decisions about the future?" Mr. Benartzi said in a statement. "At Acorns, I have the opportunity to apply my learnings at scale and nudge millions of customers to make decisions that will improve financial outcomes — everyone deserves to have a better and safer financial future." (More: How to help clients think smarter about retirement) Acorns CEO Noah Kerner announced Mr. Benartzi's hiring at Yahoo Finance's All Markets Summit and shared some details about his first experiment with Acorns, which looked at whether customers would rather save $5 every day, $35 per week or $150 monthly? The sum total is roughly the same, yet only 7% opted for the monthly option while 30% would save $5 a day. "Saving $5 a day makes us think about skipping a Starbucks latte (that seems doable), while $150 a month makes us think about car payments, which is a much more daunting amount to give up," Mr. Benartzi said, adding that framing investing around small, daily amounts instead of large monthly contributions can help lower-income people save more. Mr. Kerner sees the research as an affirmation of Acorn's strategy of letting investors with as little as $5 invest by rounding up their expenses and putting the change toward a portfolio of ETFs. Some claim the company's fee structure exploits small investors. But Mr. Kerner is also expanding the ways that Acorns serves investors. The company recently launched a debit card, called Acorns Spend, and retirement accounts, called Acorns Later. Mr. Kerner hopes the new products will show that Acorns is more than just a micro-investing app. (More: BlackRock bets on small-time investors with stake in Acorns) "We've solved the first big societal problem: getting people to start investing," Mr. Kerner said. "Now we're focused on how we can combine insights of psychology and economics to create an entire financial system that helps people save and invest."