Solving America’s Savings Crisis with Spare Change

Most American’s can’t afford even a minor financial emergency. Noah Kerner, CEO of savings platform Acorns, hopes to change that.

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America is in the midst of a savings crisis. The personal savings rate has declined drastically to just 3 percent annually, from 12 percent in the 1970s. Almost half of Americans say they haven’t saved enough to cover a $400 emergency expense, and more than 70 percent have less than $1,000 in savings. To say that Americans are at a financial breaking point is an understatement.

Noah Kerner, CEO of Acorns, a micro-investing app which makes it easy for anyone to start investing using spare change from daily purchases, believes his company can offer a hand up. Acorns’ mission, in the words of their CEO, is to “look after the financial best interests of the up-and-coming,” including not only millennials, but any American — regardless of age — with less than $100,000 in household income.

Their goal is to engage with customers who wouldn’t be investing otherwise by allowing them to save just pennies a day towards their future. The company is also trying to turn their customers into confident savers and investors through basic financial literacy lessons on savings, credit, borrowing/lending, etc. This multi-pronged approach, Kerner hopes, will instill in Americans the belief that upward mobility, the heart of the ‘American dream,’ is still alive and well today.

For Kerner, the company's mission is personal. Throughout his formative years, working first as a bank teller, then a DJ, and then in private wealth management, he’s had the opportunity to see both sides of the US income gap. Kerner remembers schoolmates without lunch money in New York’s East Village, and later working alongside, “tireless single moms providing for their families on $8 an hour.” The power of community and the grit and determination of the individuals he met made a lasting impression.

Kerner, a lifelong entrepreneur who began selling baseball cards at age eleven, launched three companies after finishing college, including the millennial creative agency, Noise, acquired in 2010 by Engine. At the age of 32, he decided that “starting things and building things that are exciting isn’t enough anymore,” and that he “needed to start doing things that gave back.”

Mission in hand, Kerner drew on his life experiences and realized, as he puts it now, that “financial difficulties are the leading cause of anxiety in America.”

Kerner joined Acorns as an advisor two months after launch, and soon became an investor, board director, and then CEO. While many might argue that he possesses an unusual background for a CEO in financial services, Kerner contends that he has been in the industry for over 20 years as a customer.

“The truth is,” he says, “While I’m passionate about technology and a student of finance, I came to Acorns because I believe in people. I believe we can help people reach their potential.” He credits his success at Acorns to a customer-first perspective, “Always empathize with the customer, because that’s where the best ideas emerge.”

In three years with Kerner at the helm, Acorns has welcomed more than 2.8 million investors, and the company is on track to conduct one billion trades in 2017. They’ve also added a new concept to their business model, helping customers earn a little extra money by spending responsibly through a program called Found Money. Over 150 companies — including Nike, Apple, and Walmart — will now invest in your Acorns account as a reward for shopping with them. Early 2018, Acorns will introduce its first individual retirement account, Acorns Later.

“We believe that anyone can grow wealth,” says Kerner. “Think about all the people who have been able to grow substantial wealth. Many of them came from nothing. That potential is there for anyone, and I feel honored that we get to help people achieve it.”

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