Automatic Investment Neobank Acorns Has Taken a Turn for the Worse

Neobanks come in many forms, and Acorns has stood out as one of the more unique choices since its founding in 2012. Since then, it has received $507 million in funding, received the title of one of the best neobanks in the US, and has become a well-known name among its peers. However, recent reviews have cast a different light on the platform during a time when money is tighter than ever.

What Acorns offers: Among neobanks, Acorns offers quite a bit, starting with the ability to invest spare change, which is a defining feature of the platform. However, it also offers banking, earning, and learning opportunities, which all take place on a single platform.

• The Round-Ups feature invests spare change on every purchase. For instance, a purchase totaling $4.50 would become $5, with $0.50 being invested.
• There are also bonus investments when users shop with certain brands.
• Online banking services are also available, including direct deposit, check deposit, check sending, and free transfers.
• The platform has attracted over 10 million all-time users who have invested over $15 billion.

Acorns does have a monthly cost with two subscription tiers, including a tier for personal accounts and one for family accounts. The personal account is $3 per month and comes with all the features offered, such as investment and retirement accounts, banking, and bonus investments. The family account is $5 per month, but it gives users access to everything from the personal tier and an early investment account for kids.

Successes and failures of the platform: The comprehensive platform does have some upsides, such as making investments easy and offering risk-appropriate, low-cost investment portfolio options. Moreover, the easy-to-use nature of the platform expands to the interface.

However, the fees can be high, depending on the total balance of an account. Additionally, there are fees to access the checking account, which is not something seen in other top platforms. There is also no tax-loss harvesting or human advisors, and users have little to no control over investments, which is not for everyone.

Recently reduced valuation: In March of 2022, Acorns raised $300 million in funding, which should have been a cause for celebration. But the valuation only reached $1.9 billion, 13.6% lower than the $2.2 billion valuation given during a terminated SPAC merger. The terminated merger not only stopped the company’s IPO, but it had to pay a $17.5 million fee.

Shifting model: Acorns has also been shifting its model for quite some time, becoming a more comprehensive financial provider. The neobank offers a lot, and it is still looking to expand further. However, it might have stretched itself too thin, with customers noticing a definite difference between the Acorns of old and its current form.

Skyrocketing negative reviews on Trustpilot: Acorns once held a Trustpilot score nearing 5.0, but when you go there now, it has an abysmal 2.2 rating. The trend seems to be with the newest reviews from the past year, which are incredibly skewed toward the negative.

Customer service is one of the primary complaints, from getting help with technical issues to canceling a subscription or closing an account. Customers have reported instances of poor communication and slow responses, with some finding it so unreliable they said it feels like a scam.

Another major problem is the locking of accounts, which has happened to multiple customers who then have to go through customer support to get help. Combining the two issues, Acorns customers lose access to their money, sometimes when they need it most, while still being charged fees.