What Parents Need to Know Before Letting Teens Trade Stocks with Fidelity’s No-Fee “Youth Account” – CBS Los Angeles
LOS ANGELES (CBSLA) – Fidelity Investments joins a growing list of investment groups that allow teens to trade in stocks.
The brokerage giant says the Youth Loyalty Account aims to involve adolescents in saving, spending and investing. 13 to 17 year olds can trade most US stocks, exchange traded funds (ETFs) and Fidelity mutual funds through the Fidelity mobile app.
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âI think Fidelity has made this decision and realizes that there are other companies like Robinhood that have made a major dent in the teen market and the twenties market right now,â according to the planner. Certified financier Ted Jenkin, CEO of Atlanta. -based OXYGen Financial.
Fidelity says the new account will have no fees or minimums and comes with a free debit card. A parent must also have a Fidelity account.
Fidelity has announced the establishment of a new Fidelity Young account for 13 to 17 year olds. Parents of teens should already have Fidelity accounts and will have full access to monitor their children’s spending and investments. https://t.co/JZY8T8Om7H
– CNN (@CNN) May 18, 2021
Parents will have access to their children’s expenses and investments, but parental approval is not required to complete transactions. And once the teen investors turn 18, the youth account automatically switches to a standard account.
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The move comes as Congress examines investment applications and their business model. Fidelity’s rival Robinhood has come under scrutiny for permitting risky behavior by some individual investors in the wake of the rising memes stocks like GameStop and AMC.
âThey look at the Reddit charts or they follow the trends on social media and buy and sell stocks every day. And it’s not really investing. It’s really more of the game, âJenkin says.
Experts say Fidelity should make an effort to educate customers to prevent them from making reckless choices with their money.
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âWe want to make sure that people learn to invest, that they invest responsibly and that they really create wealth for themselves and for their families,â says Jully-Alma Taveras, Founder of Investing Latina.