Some college students stand out on campus by dressing boldly or driving a sweet car. Jeff Cruttenden had a brokerage account.  While at Lewis & Clark College, Jeff Cruttenden says he was often approached by students who marveled that he was an active investor. "Even in the investment club most people didn't have an investment account," he says. The reason: a combination of pricey commissions and excessive minimum balances for accounts, not to mention students feeling unsure about picking investments.  Investing is in Cruttenden's blood. His father, Walter, spearheaded E-Trade's shift to online investing in the late 1990s and later pushed Cruttenden to make his first investment at age 11. Based on his college experience, Cruttenden pushed his father to work with him to build Acorns, an application that automatically rounds up purchases to the nearest dollar and invests the difference in an index fund.  Eight months after launching, Acorns has around 300,000 users with completed investment accounts, with the average person adding $100 to their account each month, according to Cruttenden, now 28. As he proudly points out, the vast majority of Acorns' customers (about 75%) are 18-34 years old, a demographic typically ignored or turned off by brokerage services.  Acorns is just one of a growing number of investing applications that are specifically targeting the millennial generation. They range from stock trading services (Robinhood) to budgeting apps (Level, later acquired by Capital One) to algorithmic portfolio builders (Wealthfront). Each pursue some combination of lower entry costs, automated investment features and slick mobile designs that make traditional finance services look like something from their grandparent's generation.  The Acorns application automatically invests your spare change in an index fund. There is no minimum balance and it charges a $1 fee each month.  Almost all of the founders behind these investment apps point to the same event as a catalyst for their traction among a younger demographic: the financial crisis of 2007-2008.  During that brief but tumultuous period, the 150-year-old financial firm Lehman Brothers collapsed, mortgage lenders Fannie Mae and Freddie Mac had to be bailed out by the U.S. government and the big banks were put through "stress tests" to determine whether they would actually survive another financial collapse. The brands of these financial institutions were tarnished, to say the least.  "This may be one of the rare times in history when it's not an advantage to say we’ve been a business for 100 years," says Adam Nash, CEO of Wealthfront, which launched just more than three years ago and now manages $2 billion of assets from its mostly millennial customer base. "There's a greater willingness for consumers to dive into something new in finance than there has been historically."  Wealthfront's application uses algorithms to create an investment portfolio based on your desired risk preference. It is free up to $10,000 of managed assets.  While the financial crisis was unfolding, smartphones were just starting to take off. This opened up an obvious opportunity for a new set of personal finance tools that could be accessed on the go. Yet, many of the established financial services companies were — and remain — slow to adapt, creating an opening for startups.  "I feel like I’m a little bit of a goofball saying this, but building for mobile was actually a big part of it," says Baiju Prafulkumar Bhatt, cofounder of Robinhood, a stock trading service that differentiated itself from E-Trade in part by designing for mobile first. "It speaks to how backwards most financial companies approach to the product is. It's embarrassing that mobile was actually a thing."  Investors have taken notice of that opportunity as well. Acorns quietly raised more than $10 million in funding earlier this month, bringing its total financing to nearly $20 million. Robinhood has raised $16 million and Wealthfront has raised well over $100 million.  Robinhood lets users buy and sell individual stocks without paying a commission. The startup makes money through interest on the balances of its users.  Study after study shows that millennials, scarred from the financial crisis, are either too hesitant or too financially unstable to take on the risk of investing.  One UBS report found that only 12% of millennials would invest and went so far as to describe this group as "the most fiscally conservative generation since the Great Depression."  To get around some of that apprehension, many of the newer investing apps make a point of doing away with hefty fees and minimum balances just to get younger people to open accounts. Acorns, the app for building up your spare change, has no minimum balance and charges a fee of $1 per month. Wealthfront waives its fees for managing investment portfolios up to $10,000. Robinhood has no minimum balance or fees for trading stocks (unlike E-Trade, which charges $8 per order), instead making money from interest on user balances.  Many also try to appeal to users with sleek designs and, in some cases, social features. Openfolio, an app that operates on top of dozens of brokerages, connects with Facebook and LinkedIn so young investors can compare their portfolios to their peers, based on age, career or location.  "There's a gap in our confidence in understanding how to start with personal investing," says David Ma, who handles marketing and business development for Openfolio. "The quickest and most accessible, non-intimidating way to learn is just trying to understand what other people are doing and why."  Openfolio lets young investors compare their portfolios to their peers, based on age, career and location.  Beyond all that, apps like Acorns, Wealthfront and Betterment promise that users won't have to think much about their investments. All you have to do is provide a bit of information about your age and income level, then indicate how risky you want your portfolio to be and bam, you're suddenly an investor with an account that manages itself.  Financial planners we spoke with were generally positive about these apps getting younger people into investing, but some questioned this set-it-and-forget-it approach.  "Asking a person for his risk tolerance is sort of like asking what he wants to do when grows up. That's a very tough thing to get a hold of," says Frank Boucher, a CFP with Boucher Financial Planning. "Defining your risk tolerance is not as easy as filing out a form or clicking a button."  Bhatt, from Robinhood, visited Berkeley's investment club earlier this week to give a talk and was surprised to find a packed room filled with more than 100 college students. That, combined with the fact his customers' average age is about 26, made him feel like Robinhood had succeeded in reaching the right audience.  The concern now, he says, is making sure Robinhood grows up with its customers without becoming too complicated and sacrificing the formula that would make it enticing to the next generation of young investors.  "If the customers get mature and start leaving Robinhood," he said, "I think we will have royally messed things up."
A new crop of investing apps are finding traction with a younger audience by focusing on mobile, automation and doing away with minimum balances.