Acorns Adds Chair of Behavioral Economics Committee Shlomo Benartzi To Launch "Money Lab"

IRVINE, Calif., Sept. 20, 2018 /PRNewswire/ -- Acorns, the country's fastest-growing financial wellness system with 4M users, today announced that Shlomo Benartzi, professor and co-founder of the Behavioral Decision-Making Group at UCLA Anderson School of Management, has joined as Chair of the Behavioral Economics Committee.

Benartzi is bringing together a network of world's leading behavioral scientists to launch "Money Lab," an initiative that aims to create, test and build solutions to increase the financial well-being of the up and coming in America, with a special focus on savings and investment.

The first call for research proposals for field experiments focused on reducing consumer spending has proved that there is great interest in the initiative: academic teams from 25 universities (e.g., Carnegie Mellon, Chicago, Colorado, Columbia, UCLA, Yale) have submitted project ideas.

Along with Nobel Laureate Richard Thaler of the University of Chicago, who is also an advisor to Acorns, Benartzi pioneered the Save More Tomorrowtm (SMarT) program, a behavioral prescription designed to help employees increase their savings rates gradually over time.

"I've spent my entire career trying to answer a simple question: how can we get everyone to make better financial decisions about the future?" said Shlomo Benartzi, Senior Academic Advisor. "At Acorns, I have the opportunity to apply my learnings at scale and nudge millions of customers to make decisions that will improve financial outcomes -- everyone deserves to have a better and safer financial future."

Benartzi's first experiment powered by Acorns has focused on experimenting with the way customers respond to a simple, yet important question: would they like to save $5 every day, $35 a week or $150 a month? The total amount of money set aside is practically the same, yet while only 7 percent opted to save $150 a month, nearly 30 percent decided to save $5 a day.

"What accounts for this huge shift in preferences, even when all the choices are equivalent? Saving $5 a day makes us think about skipping a Starbucks latte (that seems doable), while $150 a month makes us think about car payments, which is a much more daunting amount to give up," Benartzi concludes.

In addition, the findings from this first experiment show that framing investments as daily vs monthly can close the savings gap between the lower and upper income users; for example, someone who is making $25,000 a year and saves $5 daily can close the retirement savings gap with someone who makes $100,000 annually.

Acorns makes big decisions small for its customers through the simplification and automation of micro-investing. With a growing emphasis on data, behavioral insights and analytics the company is building an even more intuitive and efficient customer experience.

"We've solved the first big societal problem: getting people to start investing. Now we're focused on how we can combine insights of psychology and economics to create an entire financial system that helps people save and invest - our Money Lab can really make an impact." said Noah Kerner, CEO of Acorns.

About Acorns
Acorns is the country's fastest-growing financial wellness system with 4M users. Its easy-to-use, mobile-first technology makes it simple for anyone to set aside and invest life's spare money. Acorns allows customers to automatically invest in a low-cost, diversified portfolio of exchange-traded funds offered by some of the world's top asset managers (including Vanguard and BlackRock). Customers grow their wealth in one of five portfolios constructed with help from world-renowned Nobel Laureate economist Dr. Harry Markowitz. Acorns smart portfolio algorithms automatically work in the background of life, helping users build wealth naturally, pennies at a time. From Acorns mighty oaks do grow. You can access Acorns simply and easily via the app for iPhone, Android or desktop. Visit Acorns.com for more.

SOURCE Acorns