Investment Apps Booming: Competition heats up over millennial consumers

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Millennials live their lives on their mobile phones. Some investment advisors see that as an opportunity to offer their services on mobile apps and hope the effort will attract a new generation of customers. CGTN's Mark Niu has more from San Francisco.

Banks and brokerages are scrambling to fend off a new wave of competitors - investment apps that are becoming increasingly attractive to young people.

The zero-fee stock trading app called Robinhood now has more than five million customers and is valued at more than five-and-a-half billion dollars.

BAIJU BHATT, CEOROBINHOOD "We also had the crazy idea that if we made it free, if we made it really easy to use on mobile that we'd see a new generation of customers."

For twenty-something newlyweds Stephen and Kathryn Fernandez, financial guidance comes in the form of this -- an app called Twine.

STEPHEN FERNANDEZTWINE USER "It sort of translates investing into the language of people our age. Because we aren't used to going into the bank. We're used to doing all our banking on our phone. So person to person contact isn't a normal thing for our generation apparently."

The couple, who have separate banking accounts, used Twine to create joint accounts to help them save for everything from vacations to a home.

The app encourages them to hit goal points, making them feel like a "virtual someone" has invested interests in their success.

KATHRYN FERNANDEZTWINE USER "I live my life on my phone. Everything I do is on my phone so the fact that this is one less thing that I have to worry about of taking an hour out of my day to go drive somewhere, physically get out of the car, meet someone, build that relationship. The relationship is really with the app."

MARK NIUSAN FRANCISCO "In fact, Twine released the results of a consumer survey on investing habits of 1000 U.S. adults. It found that while most millennials have a strong understanding of investing, 46% are not investing outside of a pension plan."

URI POMERANTZ, CEO & CO-FOUNDER TWINE "I think a lot of folks, they spend more time on Facebook or emojis than investing. It's one of the things you know it's good for you in the long-term, but there's a lot of fear around it, frustration and uncertainty. So people just don't get started or get started much too late."

At Twine's headquarters, you'll find a slew of programmers working to make the app both more intuitive and attractive, especially to millennials.

Twine's portfolio gets expertise from its financial services parent company John Hancock, but it's up to algorithms to better understand each investor.

Founder Uri Pomerantz says its research shows 47% of millennials believe they need at least a thousand dollars to start investing.

With Twine, users can begin with just one dollar.

URI POMERANTZ, CEO & CO-FOUNDERTWINE "The big thesis and why we are so excited about it, is democratization of finance. Basically saying no matter how old you are, no matter how much money you have, you can get started with this financial adviser and get sort of what really sophisticated investors previously got and bring that down to everyone's level."

While Pomerantz says companies like his continually work on putting the knowledge of a human financial advisor into software, the biggest challenge is still convincing a tech savvy generation to start planning and saving early for their financial future. Mark Niu, CGTN, San Francisco.