In studies conducted by FINRA, just over 50% of adults say finance makes them anxious, with individuals between the ages of 18 and 34 having the highest levels of anxiety.
The source of this uneasiness?
In part, it is the fear and struggles to keep up with widening gaps in the economy.
Education and access are the two factors that may help to narrow the gap, and the founding team at Bumper, a trading app purpose-built for teens, believes it has the answer.
Check out Benzinga’s conversation with Bumper CEO Luke Moberly for more on fostering financial markets engagement with younger generations of investors.
Benzinga: Hey Luke, nice to meet you. Care for an introduction?
Luke Moberly: I’m originally from Lincoln, Nebraska. I graduated high school in 2020 and decided to take a gap year, and worked full-time.
Later, I did a data science boot camp to teach myself a bit of programming and data analysis. Then, in the fall of 2020, I applied to an incubator and was accepted.
Eventually, after spending about four to six months ideating, we landed on teen investing and began building the company.
I’m also a freshman at Stanford, studying computer science.
Why teen investing?
The motivation was my frustration with the lack of financial education in school.
We spent more time learning how to balance a checkbook than the entirety of the stock market and investing. I don’t know about you, but I don’t think I’ll ever balance a checkbook in my life.
So, a lot of the financial curriculum is outdated and many teenagers lack knowledge about the power of investing early, compound interest, and different ways to build wealth.
Then, we noticed all of the focus around meme stocks and cryptocurrency. There was this general rise in interest among the younger generations, and so we wanted to provide a safe and more responsible way for them to learn about investing.
How does Bumper work?
The goal is to provide a stepping stone to some of the more complicated financial tools people have access to when they turn 18.
We do allow for the investment of real money on the platform; users invite an adult sponsor, usually a parent or guardian, to oversee their account. That account sponsor is the legal owner of the account, and so they’re the final executor of trades.
So, when a teenager requests a trade, a parent can approve or deny it.
Through Alpaca Securities, we offer about 2,000 securities on the platform, mainly blue-chip stocks with market caps greater than a billion or large ETFs. No margin trading, options, and cryptocurrencies.
It’s a safe environment to learn about investing.
What’s your differentiator from potential competitors out there?
The teen market is underserved. A lot of the new apps are focused on the 18 to 24 age range, and that’s fine. However, even five to ten extra years of investing have massive implications on long-term portfolio growth.
That’s where our focus and differentiator is.
What happens after users turn 18?
They drop off the parental oversight and have full control over their account.
We also change the app interface. Eventually, we’ll expand access to more advanced securities or trading options.
Going forward, what else can you add to retain users?
We’ll be looking to add retirement accounts and, potentially, custodial IRAs. At the moment, though, we’re just focused on improving some of our educational content.
We’re envisioning mock trading competitions and a mission-style point system where teenagers can, depending on their past level of education, start at different points and complete missions around trivia questions.
Tell us about your team.
The team is spread out around the world. I’m working with a couple of other college students out here in California, one at the University of Virginia, and another at the University of Nebraska.
We also have an ambassador and intern program. We meet with 60 or 70 teenagers a week and get their feedback on the app and what they’re interested in finance and investing.
It’s a great way to foster the community offline.
Largest challenge you’re faced with?
Getting the parents on board. We’re a newer company, and we don’t have name recognition.
So, we’ve found pretty high engagement with teenagers, but that doesn’t always translate into engagement on the app because they have to sign up with parents.
Our goal is to find ways to work with the parents.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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