Walter Cruttenden Comment On Special Notice – 6/30/21

Re: Effective Methods to Educate Newer Investors Dear Distinguished FINRA Representatives, As a FINRA member for 50 years, founder of several retail securities firms, and creator of Acorns, which has helped millions of new investors get started, I’ve gained a practical understanding of the behaviors and needs of novice investors. The number one finding is that people rarely learn about investing through everyday activities - like reading articles, watching videos or playing games - they learn investing by investing. The old adage is true, the best education comes from experience. The lack of investing participation from younger generations is driven by perceptions that you need a lot of money to get started, or it is suppressed by anxiety around the thought of losing money. These fears cause people to shy away from the subject or put off investing well into the future. However, when people start investing small amounts of money first, even a few dollars, it greatly reduces the perceived risk, and something magical happens: these “investors” are more likely to read articles about investing, and hence gain confidence, versus people that have no money at stake. Therefore, the best way to help new investors educate themselves is by getting them started on the road to investing as quickly and easily as possible. One way this is happening is through apps like Learn & Earn (https://learnandearn.com/), where people sign up to earn a little money for taking a short quiz, and the funds earned go immediately into an investment account for the individual. It is a no-risk way to get started yet creates a sense of accomplishment. We find that more than half want to continue to learn, earn and grow their investment accounts. Well-known sponsors/partners like Franklin Templeton, the Tiger Woods Foundation, ARK Invest, & BlackRock put up the money for the courses. Initially, the funds earned for completing courses go 100% into a widely diversified portfolio comprised of index ETFs for the individual. But as the young person continues to learn new subjects and earns more money, they have the opportunity to choose up to 10 stocks (from a pre-selected list), with each position comprising no more than 5% of the portfolio - and the remaining 50% of the portfolio is still held in diversified ETFs. This is a concept called “RoboBumpers”, which like bowling for kids, ensures no one gets a gutter ball :) This combined experience of a managed account with choice is sort of like the best of the two most popular investing apps, Robinhood and Acorns. It gives young people a solid portfolio to start with but also a voice in the securities selection process. Again, experience is the best way to learn and turn novice investors into knowledgeable investors. In answer to FINRA’s last question in the Special Notice of 6-30-21, I would suggest FINRA take part of the $30 million set aside for the New Investor Initiative and join the other sponsors in directly seeding investment accounts, so more young people can get started. Reducing fear and anxiety for first-time investors, and seeding new accounts, creates more knowledgeable investors and more new accounts. Sincerely, Walter Cruttenden