Investment app Stash aims to make the process of finding and selecting investments — specifically exchange-traded funds — easy and approachable for beginners. The service repackages existing funds into easy-to-understand themes based on risk tolerance, goals, interests and values.
Stash doesn’t manage investor accounts directly, but rather helps guide investors through the process of building an ETF portfolio. The service has a $5 minimum investment and charges $1 a month for account balances under $5,000 ($2 per month for retirement accounts under $5,000) and a 0.25% annual fee for accounts with $5,000 or more. Stash also recently started offering custodial accounts, which allows parents to set up investment accounts for their children.
- Account fee: $1/month for accounts under $5,000 ($2/month for IRAs under $5,000); 0.25% for accounts $5,000 or more
- Account minimum: $5
- Promotion: Free for the first month
Compare Stash Invest to other robo-advisors
0.40% - 0.50%
1month free management
$15,000amount of assets managed with no fee
$50cash bonus with deposit of at least $1,000 in first 30 days
2018 Nerdwallet Awards
Best robo-advisor overall
Best for socially responsible investors
Stash is best for:
- Investors who want guidance selecting investments
- New investors
- Thematic or impact investors
|Account subscription fee||$1/month for accounts under $5,000 ($2/month for IRA and Roth IRA accounts under $5,000); 0.25% for all accounts $5,000 or more. Stash is not a robo-advisor and doesn't have discretion to manage customer accounts.|
|Investment expense ratios||Expense ratios average 0.34%|
|Portfolio||Over 35 ETFs available
|Account fees (annual, transfer, closing)||No annual, inactivity or outgoing transfer fee|
|Accounts supported||Individual brokerage accounts, traditional and Roth IRAs, custodial accounts|
|Customer support||Phone support Monday-Friday, 8:30 a.m. to 6:30 p.m. Eastern, and Saturday-Sunday, 11 a.m. to 5 p.m. Eastern; email support|
|Promotion||First month free
Where Stash shines
Investment guidance: Stash’s goal is to help beginners learn how to invest, and that’s what it does best. The app asks new account holders a few questions to determine risk tolerance and goals. It serves up a list of suggested ETFs, narrowing the options to those that make sense for the user’s financial situation.
The app notes which investments should serve as the foundation of the portfolio — the largest slice of the user’s asset allocation — and which should be considered a complement. The user is responsible for building a portfolio out of the suggestions, but the app’s Stash Coach feature will nudge back or serve up educational content if it notices a lack of diversification.
We like that Stash presents the investments in an easy-to-read snapshot. On one screen, users get:
- A quick, snappy synopsis of what the investment is all about
- A bar visualization that represents the level of risk
- A list of the investment’s holdings
- The underlying security — the ETF that Stash has renamed (more on this below)
- The ticker symbol, last price and expense ratio
Users can then dive deeper into performance, and a social component provides insight into who else with the same risk profile owns each investment. The app allows users to link their contacts or Facebook account, if they wish. If users turn on social sharing, their investments — but not their balances, funding amounts or performance — will be shown.
There are question mark symbols that launch quick definitions or explanations. A section of Stash is dedicated to educational content, tailored to users based on the information they plugged in when getting started.
Thematic and mission-driven direction: Stash renames the ETFs to better reflect their holdings. The SPDR S&P BioTech ETF is called Modern Meds. The Vanguard Small-Cap ETF is called Small but Mighty. The iShares Core Growth Allocation ETF is dubbed Aggressive Mix. They’re then further divided into three categories: I Believe, I Want and I Like.
I Believe investments are exactly what you’d imagine — mission-driven themes designed to guide users toward investing with their hearts. Clean & Green is clean energy, via the iShares Global Clean Energy ETF. Do the Right Thing is socially responsible companies, via the iShares MSCI USA ESG Select Fund. Equality Works is companies that support LGBT employees with equal rights, via the Workplace Equity Portfolio ETF.
The I Want category is designed to align with investing goals. Examples are Park My Cash and Aggressive Mix. The I Like category is dedicated to things users might, well, like, including Retail Therapy and Internet Titans.
Thematic investing in general isn’t new, and the approach is similar to that of Motif Investing, though with far less work on the part of Stash. Motif pulls together baskets of up to 30 stocks or ETFs around a theme or trend, rather than simply renaming existing ETFs.
Low account minimum: All it takes is $5 to get started with Stash, a reasonable minimum for even the greenest of investors. That low minimum is made possible by fractional shares: Stash buys the ETFs, then splits them among its investors. That means you can build a diversified portfolio with very little money.
Stash also has a tool to motivate users to invest additional money. Users can quickly adjust a slider to indicate their monthly deposit and growth potential, or anticipated investment return, and the app will show how much the user could have after one year, five years and 10 years.
Savings help: Stash’s Smart-Save feature aims to nudge people into better savings habits. The tool monitors the ebb and flow of a user’s checking account balance to find opportunities to save. When it sees such an opportunity, the tool automatically moves that money into the user’s Stash account. Transfers are made only if it’s possible to do so while still maintaining a safe cushion in the checking account. Uninvested money is held in an FDIC-insured account.
Custodial accounts. Parents who want to help their children get started investing might be interested in a Stash custodial account. That said, they should consider the fees and expense ratios we detail below.
Where Stash falls short
Subscription fee: Stash’s fees are charged to the user’s linked bank account, not against the investment portfolio. The service costs $1 a month for balances under $5,000 ($2 a month for IRA balances under $5,000), then the fees switch to a percentage of assets. Balances of $5,000 or more pay 0.25% per year.
Many of Stash’s customers will fall into the $1 fee tier, since the service targets new investors. That sounds inexpensive, but as a percentage of assets, it’s actually quite high, especially for lower balances. An investor with a $500 balance will pay 2.4%; someone with a $2,500 balance will pay 0.48%.
Even the 0.25% charge once an account reaches $5,000 is high compared with the landscape of services, many of which offer more value:
- Wealthfront, a robo-advisor, manages balances under $10,000 for free (NerdWallet readers get $15,000 managed for free), then charges 0.25% on the amount over that. This service will build your portfolio, rebalance it and apply tax-loss harvesting on taxable accounts.
- Acorns, likely Stash’s chief competitor, is a robo-advisor app that rounds up transactions in linked bank and credit card accounts, then invests them in a managed ETF portfolio. It charges the same fees as Stash — including the $1 monthly charge on balances below $5,000 — for rounding up transactions and ongoing investment management, including rebalancing.
- WiseBanyan, another robo-advisor, doesn’t charge any management fees. It matches users with an ETF portfolio and offers automatic rebalancing. Some services, like tax-loss harvesting, are available at an additional cost.
The value that investors would get from Stash long-term is debatable. With a small amount of research, you could find the ETFs that Stash offers, or suitable alternatives, through many online brokers commission-free. Once you’ve built your portfolio, Stash isn’t involved in managing it the way a robo-advisor would be, though the company is a registered investment advisor and a fiduciary.
The app will, however, provide an evolving library of educational resources and maintain a list of suggested additional investments based on your risk profile and existing portfolio. It also makes it easier to find investments that align with your values.
ETF expenses: The ETFs available through Stash have an average expense ratio — the annual fee charged to investors — of 0.34%. That’s high compared with the ETFs curated by robo-advisors; most services are heavy on Vanguard’s very low-cost funds. To be fair, Stash brings more niche funds into the mix, specifically in its I Believe category. Thematic investors are often willing to pay more to invest in causes or companies they believe in.
Transparency: The signup process isn’t the most investor-friendly, though it also isn’t hard. You’ll need to input vitals and financial details into the website or app, the same as you would for any other “brand-name” brokerage. After signing up, the company sends a text message to download its app, or you can download it directly from an app store.
As part of signing up, the app asks you to commit to a regular deposit amount, though you can immediately opt out of that amount. This request occurs before you even know the potential investment options or what they cost. Stash’s website is light on information when it comes to the available investments or their expense ratios — we’d prefer to see a list of investment options prior to signing up and sharing personal information.
Is Stash right for you?
If you’re looking for a little hand-holding while you build a portfolio of ETFs, Stash may be a good fit. That kind of educational assistance may save money in the long run — you’ll avoid costly mistakes and learn how to manage your own portfolio. Stash also provides access to fractional shares, allowing you to diversify with very little money.
But once you’ve learned the basics, you may find that you’re unlikely to get much more in exchange for Stash’s ongoing monthly fee. At that point, it’s a good idea to explore branching out on your own. There’s no fee to close or transfer funds out of your Stash account.
Interested in other brokers that work well for new investors? See NerdWallet’s rankings of the best brokers for beginners.