Investing as a minor under 18 raises important legal and ethical concerns. While some investment apps may allow opening accounts before 18, there are restrictions around trading and withdrawing funds that aim to protect minors. It’s crucial to consider whether it’s appropriate for a minor to actively trade investments or if safer alternatives like custodial accounts exist. Any investment app targeting minors should be examined closely regarding security, fees, parental controls and compliance with regulations.
Laws restricting investment activities for minors
There are laws in many countries restricting the investment activities allowed for legal minors, those under the age of 18 or legal adulthood. These laws intend to protect children from making imprudent financial decisions by limiting higher risk activities. Apps that allow minors to actively trade should have strong parental oversight controls and comply with local regulations.
Ethical concerns around promoting active trading to minors
Beyond legal restrictions, there are ethical concerns with promoting active stock trading and other higher risk investment activities to minors. Children lack financial experience and the judgement to make informed trading decisions. Investment apps targeting minors should focus on financial education and conservative investment products.
Custodial investment accounts as a safer alternative
For minors interested in investing, custodial investment accounts can provide exposure while limiting trading ability until adulthood. A parent or guardian controls the account and asset allocation. Apps exist to facilitate easy opening and tracking of custodial accounts, providing children visibility into investments.
Any investment app for minors should prioritize security and compliance
Given the sensitive nature of holding minors financial data, security and regulatory compliance are paramount for any investment app targeting those under 18. Companies should clearly communicate policies, protections and parental control options. And features allowing trading or withdrawing funds should adhere to local laws.
Investment apps marketed towards minors warrant additional scrutiny regarding security protections, fee transparency, parental controls and adherence to laws limiting higher risk investment activities. Companies allowing minors to actively trade investments may raise legal or ethical concerns.