[debarshri]

To me it feels like a feature to existing trading/investing apps or platforms than a standalone product. Wouldn't it be quite easy for other established apps to do this? I mean, barrier seems to be pretty low for established players. Only way I see them creating barriers would be creating proprietary strategies.

Also, the fact that not many of them have this feature is kind of a red-flag. But then I am not the expert and I might be absolutely wrong.

[cj]

> feels like a feature to existing trading/investing apps

I had the same thought at first. But at the end of the day the competitive edge a company like Financial Choice has might simply come down to marketing and UI/UX.

Wealthfront, Betterment, Robinhood, etc are very narrowly targeted at investors (e.g. if I send a link to Wealthfront to my cousin who wants to earn a return on a $5000 checking account she set up for her young child, or even her own checking account, she's very unlikely to convert)

[stefanheule]

We have debated this question a fair bit at Financial Choice. I agree, the barrier does seem low, but also keep in mind that this is often the case for new companies, and the barrier is often higher than it seems for existing companies. For really established players, it's often hard to move fast (anyone who has worked at a big company probably knows this, there is often so much red tape).

But I also think for others, this is quite a mental shift on how to look at checking and investing accounts. There are some investment companies like Wealthfront and Betterment who are starting to move into checking accounts, but it feels very much like a afterthought to a customer.

We are hoping to truly unite the two account types.

[notahacker]

My suspicion is the main reason is that the costs of providing checking account functionality are high (banks subsidise this with penalty fees and marketing loans/mortgages and credit cards to their checking account customers as well as earning significantly higher returns oj their investment portfolio than they pay depositors). As much as in theory I'd love to hold money I might need to spend in the near future in fungible, low-risk government bonds, the middleman provides quite a lot of value in convenience.

Presumably you have put some thought into how you're going to manage these costs (beyond not providing branches) or what checking account functionality you are uninterested in providing.

[jprafael]

The problem is incentives. Banks are required at least a 10% cash colateral (deposits) to issue new loans. If the funds are automatically invested into stocks/bonds/etfs, then the capital available for banks to issue new (profitable) loans decreases.

[debarshri]

That's not a great premise for a company either. You are implying that this company is a risky investment.

[vineyardmike]

It is a risk. It doesn't sound FDIC insured AND you can face market loss.

[rmah]

Yes, some (many?) brokers already offer similar services (i.e. debit card and checking). I think they typically only allow those to access cash on hand though and won't initiate any sales of any securities.