Squirreling away my nuts?

Hi Scott,What do you think of the new app ‘Acorns’? Apparently it’s a new smart way to invest without too much thought. (Or perhaps it’s just a lazy approach?) I'm skeptical, but intrigued at the same time!

James

Hi James,Let’s back it up a bit. For those of you who don’t know, the Acorns is the hottest thing in finance since Commsec’s Craig James appeared in the buff in a Men's Health Magazine. The app was launched last year in the US and reportedly has 700,000 users, and it’s growing faster than Tom Petrovski’s caveman beard. Now it’s in Australia.Essentially the app allows you to invest your pocket change into the share market. Let’s say you buy a copy of Men's Health for $9.00. You could tell the app to push the $1 into your Acorn account and invest it. You can also tell the app to invest $5 or $10 each day, or month.Importantly, there is no minimum amount you need to invest, and the costs are cheap (unless you only buy one magazine for the year): members with account balances up to $5,000 get charged $15 a year, and anything over that cops a fee of 0.275 per cent of the balance per annum.It’s a good deal, and I like it. But watch out. You see, I think the big banks offer their own Acorn inspired apps in the not too distant future. It’s a great loss leader to capture kids, and later upsell them. The banks love getting their hands on your nuts, and having a nibble. Hold on to your acorns!

Scott