Stash Review: A Comprehensive Analysis of the Investing Platform
Introduction
In this article, we will provide a detailed analysis of Stash, a popular online and mobile financial service that offers a unique combination of DIY investing and automated portfolio management. We will explore the strengths and weaknesses of Stash, its pricing options and features, and why it may or may not be the right choice for investors. Additionally, we will compare Stash to other robo-advisors and investment platforms to give you a comprehensive understanding of its offerings. So, let’s dive into the world of Stash and see if it’s the right investment platform for you.
Stash: Merging DIY Investing and Automated Portfolios
Stash distinguishes itself from other robo-advisors by providing a platform that allows investors to choose their level of involvement in their investment decisions. With Stash, you have the flexibility to be as hands-on or hands-off as you prefer. This unique feature makes Stash an attractive option for investors who want the convenience of automated portfolios while still having the ability to select their own investments.
DIY and Automated Investing
Stash offers a hybrid approach to investing, combining the benefits of DIY investing and automated portfolio management. Unlike many other robo-advisors that are fully hands-off, Stash allows you to choose your own investments if you desire. This means you have the freedom to select individual stocks and ETFs that align with your investment goals and preferences.
Stock Round-Ups
If you prefer a more passive approach to investing, Stash has a feature called “Stock Round-Ups.” This feature allows you to link your debit or credit card to your Stash account, and every time you make a purchase, Stash will round up the purchase to the nearest dollar and invest the difference in your portfolio. This effortless way of investing allows you to grow your investments without actively managing them.
Stock-Back® Card
One of the standout features of Stash is its Stock-Back® Card. With this card, you can earn stocks as rewards when you make purchases. For example, when you shop at certain retailers, you can earn stocks in those companies. This unique rewards program allows you to build your investment portfolio while spending money on everyday purchases.
Where Stash Shines
Stash has several strengths that make it an appealing choice for investors. Let’s take a closer look at these advantages:
Fractional Shares and DIY Investing
Stash offers the option to buy fractional shares, which allows you to invest in high-priced stocks that you may not be able to afford otherwise. This feature is particularly beneficial for investors with limited funds who want to build a diversified portfolio without breaking the bank.
Customizable Portfolios with Automated Management
Stash’s automated portfolio management, known as Smart Portfolios, provides a well-diversified mix of over 4,000 individual stocks and ETFs. While the portfolio is automated, you still have the freedom to choose your own investments and customize your portfolio according to your preferences.
User-Friendly Interface and Educational Resources
Stash’s platform is user-friendly and intuitive, making it easy for both novice and experienced investors to navigate. The platform also offers a range of educational resources, including guides and how-to articles, to help users make informed investment decisions. Stash aims to empower investors by providing them with the knowledge they need to succeed.
Where Stash Falls Short
While Stash has many strengths, it also has some limitations that may be important to consider before using the platform. Let’s explore these areas where Stash falls short:
No Managed IRAs
One of the drawbacks of Stash is that it does not offer automated management for Individual Retirement Accounts (IRAs). If you want a robo-advisor to handle your IRA investments, you will need to look elsewhere. Stash only supports managed individual brokerage accounts, which may limit your options if you prefer an IRA.
No Tax-Loss Harvesting
Another area where Stash falls short is tax-loss harvesting. Tax-loss harvesting is an investment strategy that can help reduce the amount of taxes you owe by offsetting capital gains with capital losses. Unfortunately, Stash’s Smart Portfolios do not offer this feature, which may be a disadvantage for tax-conscious investors.
Limited Personalized Advice
While Stash provides educational resources and guides, it does not offer personalized advice from human advisors. The advice provided by Stash is primarily in the form of written materials, and the personalization comes from the information you provide during the account setup process. If you prefer direct guidance from a financial professional, Stash may not meet your needs in this regard.
Stash Pricing and Fee Structure
Now let’s delve into the pricing options and fee structure of Stash. Understanding the costs associated with using Stash is crucial for making an informed decision about whether it aligns with your investment goals and budget.
Account Minimum
Stash has a low account minimum, making it accessible to investors with limited funds. The minimum deposit for a Smart Portfolio is $5, while the minimum deposit for a brokerage account, Roth IRA, and traditional IRA is just $0.01. This low barrier to entry allows investors of all financial backgrounds to start investing with Stash.
Account Management Fee
Stash offers two pricing tiers: Stash Growth and Stash+. Stash Growth is priced at $3 per month, while Stash+ is priced at $9 per month. The main difference between the two tiers is the additional features and benefits offered with Stash+. These include more extensive financial counseling services, two custodial accounts for children, higher rewards rates on the Stock-Back® Card, and increased life insurance coverage.
Investment Expense Ratios
Stash’s investment expense ratios are competitive compared to other investment platforms. The ETFs available through Stash have an average expense ratio ranging from 0.08% to 0.14%. While these fees are relatively standard, it’s important to consider them in conjunction with the monthly account management fee to evaluate the overall cost of investing with Stash.
Account Fees
Stash charges no standard transfer fee for moving assets to another brokerage firm. However, instant transfers incur a 1% fee. Additionally, if you choose to perform a full transfer of your assets to another brokerage firm, Stash charges a $75 outgoing ACAT fee. It’s essential to be aware of these fees when considering transferring your assets from Stash to another platform.
Stash Portfolio Mix and Socially Responsible Investing
A crucial aspect of any investment platform is the portfolio mix it offers. Let’s examine Stash’s portfolio mix and its approach to socially responsible investing.
Portfolio Mix
Stash’s Smart Portfolios provide a well-diversified mix of over 4,000 individual stocks and ETFs. The portfolios include exposure to U.S. stocks, international stocks in both developed and emerging markets, and U.S. and international bonds. Stash uses fractional shares to ensure that all of your money is invested, even if you don’t have enough funds to purchase whole shares.
Socially Responsible Portfolio Options
Unfortunately, Stash does not offer an automated socially responsible portfolio. However, within the DIY portfolio available at any price tier, Stash provides access to thematic ETFs, including clean energy and women’s empowerment. While this may not fully satisfy investors seeking a dedicated socially responsible investing option, it does offer some opportunities to align investments with specific values.
Stash Customer Support and Banking Options
Let’s explore the customer support options and banking features that Stash provides to its users. These aspects can significantly impact your overall investing experience, so it’s important to understand the level of support and banking services available.
Customer Support Options
Stash offers phone and email support to its users. Customer support is available from Monday to Friday, 8 a.m. to 8 p.m. Eastern Time, and on weekends from 10 a.m. to 6:30 p.m. Eastern Time. While Stash provides adequate customer support hours, it’s worth noting that some investors may prefer additional support options such as live chat or 24/7 availability.
Banking Account and Cash Management Options
Stash provides access to an online banking account through a partnership with Stride Bank. This account comes with a Stock-Back® Card, a debit card that rewards users with stocks instead of cash back or points. While the Stock-Back® Card is an innovative feature, it’s important to consider the overall banking experience, including fees, interest rates, and additional perks, when evaluating Stash’s banking options.
Stash vs. Competitors
To fully understand Stash’s position in the market, it’s essential to compare it to other robo-advisors and investment platforms. Let’s explore how Stash stacks up against its competitors in terms of pricing, features, and overall user experience.
Stash vs. Betterment
Betterment is a well-known robo-advisor that offers a range of investment options and features. While both Stash and Betterment provide automated portfolio management, Betterment stands out for its tax-loss harvesting feature and lower pricing structure. Betterment charges a 0.25% management fee, which can be more cost-effective for investors with larger account balances. However, Stash’s hybrid approach, allowing investors to choose their own investments, may appeal to those who want more control over their portfolio.
Stash vs. SoFi Invest
SoFi Invest is another investment platform that offers a wide range of financial services, including banking and lending. SoFi Invest differentiates itself by offering zero management fees for its robo-advisor service and commission-free trading. While Stash has a more extensive range of investment options and features, SoFi Invest may be a better choice for cost-conscious investors who prioritize commission-free trading and want an all-in-one financial services platform.
Stash vs. TD Ameritrade
TD Ameritrade is a well-established brokerage firm that provides a comprehensive range of investment options. While Stash offers a unique combination of automated portfolio management and DIY investing, TD Ameritrade stands out for its extensive selection of investment vehicles and educational resources. TD Ameritrade does not charge a fee just to have an account, making it an attractive option for investors who want a more traditional brokerage experience.
Is Stash Right for You?
Now that we have examined the strengths, weaknesses, and pricing options of Stash, it’s time to determine if it’s the right investment platform for you. Consider the following factors when making your decision:
- Investment Style: If you prefer a hybrid approach that combines DIY investing with automated portfolio management, Stash may be a good fit for you.
- Fractional Shares: If you want to invest in high-priced stocks with limited funds, Stash’s fractional shares feature can be beneficial.
- IRA Management: If you prioritize automated management for your IRA investments, Stash may not meet your needs, as it only supports managed individual brokerage accounts.
- Tax Strategy: If tax-loss harvesting is essential to your investment strategy, you may want to consider other robo-advisors that offer this feature.
- Financial Guidance: If you prefer personalized advice from human advisors, Stash’s written materials and guides may not provide the level of guidance you desire.
- Banking and Rewards: If you value an innovative banking experience and the opportunity to earn stocks as rewards, Stash’s banking options and Stock-Back® Card may be appealing.
Conclusion
In conclusion, Stash offers a unique platform that allows investors to blend DIY investing with automated portfolio management. With features like fractional shares, Stock Round-Ups, and the Stock-Back® Card, Stash aims to provide a comprehensive investment experience. However, it’s important to consider the platform’s limitations, such as the lack of managed IRAs and tax-loss harvesting. By carefully evaluating Stash’s pricing options, portfolio mix, customer support, and banking features, you can determine if it aligns with your investment goals and preferences. Remember to compare Stash to other robo-advisors and investment platforms to make an informed decision. Happy investing!
Disclaimer: The information provided in this article is for informational purposes only and should not be considered financial or investment advice. Always conduct thorough research and consult with a financial advisor before making any investment decisions.
