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BlackRock Makes Push for Small Investors

May 11, 2018

BlackRock is no longer content dealing predominantly with large investors such as sovereign wealth funds and pension funds, Bloomberg writes. The world’s biggest asset manager is now vying for investors who put away mere cents with an investment in the micro-investing platform Acorns, according to the news service.

BlackRock has become an anchor investor in the digital startup, according to a news release cited by Bloomberg. Part of the deal includes partnering on developing new technology for Acorns users and having Frank Cooper, BlackRock’s chief marketing officer, observe Acorns board meetings, the news service writes.

Acorns’ investors typically put away just a few cents at a time, with an average account size of around $500 and fees as low as $1 a month for automated investing through smart portfolios designed by robos, Bloomberg writes, citing a company representative.

Nonetheless, this could be a fortuitous entry for BlackRock, which is also the world’s largest provider of ETFs, according to the news service. Larry Fink, the company’s CEO, talked up the importance of even minimal investing in the company’s 2017 letter to shareholders, Bloomberg writes.

And while Acorns already offers BlackRock ETFs alongside other products, the startup has 3.3 million accounts, according to the news service. Moreover, those customers are predominantly 18 to 34 years old, Acorns’ representative tells Bloomberg. This age group is expected to account for 41% of all RIA clients within five years, according to a recent report from TD Ameritrade.

By Alex Padalka
  • To read the Bloomberg article cited in this story, click here.