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When I first heard of the Acorns investing app, I was intrigued and optimistic. It sounded like a great option for beginner investors who wanted to get an easy start. I decided to check it out myself, and my optimism quickly waned.

Here’s why I’d recommend staying away from this one.

## 1. The fee is too high for small investors

The Acorns app’s target audience is people who just want to invest small amounts at a time. This is mainly accomplished via their “Round-Ups” feature, which detects when you make purchases, “rounds them up” to the nearest dollar, and invests the difference. For instance, you buy a coffee for \$2.50, and Acorns rounds it up to \$3 and invests the 50 cents. Okay, not a bad feature (though I don’t know how I feel about an app watching all my purchases!).

Now, the Acorns app has a \$1/month fee for their basic taxable investment account, or a \$2/month fee for their retirement account. It’s meant to sound low so you don’t really question it. However, it’s important to look at the percentages. The smaller a balance you have in your Acorns account, the larger percentage that monthly fee will be for you.

As a point of comparison, the average fee for a professional financial adviser is 1% of your balance annually.

Let’s do some example calculations using the \$2/month fee (since a retirement account is a better idea for new investors than a taxable account).

• If you have \$100 in your Acorns account, \$24 a year is 24% of your balance.
• If you have \$200 in your account, it’s 12%.
• If you have \$500, it’s about 5%.
• If you have \$1000, it’s 2.4%.

As you can see, the Acorns cost doesn’t start to become a competitive rate unless you have several thousand dollars to invest. Acorns reports that their average investor puts in \$32/month, or \$384/year. In this case, it would take that average investor 5 years for the fee to get low enough to equal 1% of their balance.

And given that you could sign up for Wealthfront and have your assets managed for free up to \$5,000, and a 0.24% balance fee after you exceed \$5k…I certainly wouldn’t call the Acorns cost low at all when you compare it to the industry.

## 2. They’re slimy about referral rewards

Acorns regularly advertises the opportunity to earn more in bonuses through referrals—for instance, \$500 for referring 5 people in a month, or \$1000 for referring 12 people. This sounds pretty good, right? Almost…too good to be true?

Here’s my experience. I decided to go for one of the \$500 for 5 people incentives. I told 5 family members and friends about the app and walked them through the process of signing up. The plan was to share the bonus with them once it was paid so everyone would have a healthy start to their accounts.

The referrals took a while to show up in my account, and they displayed as “Pending” for a long time. A month went by with no bonus. I contacted Acorns customer support. They recommended having the 5 people I’d referred get in touch to confirm they had been counted. Okay, that’s a pain, but they did.

Another month passed, so I got in touch again. This time, they claimed that only 4 of the 5 people had actually used my link to sign up.

First of all, I was actually with them to help, so I know they did use the correct link.

Also, keep in mind that all five people had contacted Acorns customer service to confirm that I had referred them.

They didn’t care, refused to count the fifth person, and instantly lost my respect and support.

If a referral was not recorded due to a tracking problem on their end, that should be their responsibility to fix. They did not.

After this happened, I looked through their Facebook page reviews, and found other people with the same experience. To me, this looks like a clear pattern of false advertising and deceit. Now, some people have reported that they were paid their bonuses—so perhaps Acorns has a set monthly bonus budget, approves enough people to avoid looking like a total scam, and stiffs the rest.

Either way, the whole experience has left an incredibly sour taste in my mouth about Acorns customer service and the company as a whole.

## 3. People have reported difficulty withdrawing their money

I haven’t tried to close my account yet, so I can’t speak from personal experience on this one. However, in my research I found enough people complaining about this that, again, it doesn’t look like a fluke. People have had difficulty getting their money from Acorns withdrawals, and in some cases, they’ve even continued being charged the monthly fee after they’ve canceled their accounts.

Here’s a small sample of what users have been reporting:

This is a big, big problem. Being lied to about referral incentives is one thing, but not being able to withdraw your own money? Being charged after you’ve canceled your account? I truly wouldn’t be shocked to see Acorns in legal trouble soon if they keep this up.

## 4. Disorganized and non-transparent customer service

After essentially being told “too bad” by customer service when I attempted to resolve my issue, I contacted a few other people to get their stories. One of them, Rajiv, had quite an interesting saga of dealing with customer service. He was dealing with the same issue I was—he had referred 12 people for an incentive, but some of their accounts had gone into a limbo. Even better? He had the emails to show Acorns customer service literally contradicting themselves, and he kindly agreed to share them for the article.

Let’s take a look, shall we? Here’s an email from December 24, 2018 where they tell him he has 8 confirmed referrals for December:

And here is an email over a week later, on January 2, 2019, claiming that he only has 5 confirmed referrals for December:

Interesting how 3 successful referrals could just disappear, isn’t it? Rajiv informed me that his friends had also been calling Acorns to confirm that they should have been recorded. “Thank you for your efforts” is all he got.

I’d like to clarify that I don’t blame the customer service people themselves here. I think they’re innocent people working for an ill-managed company, just trying to earn a paycheck. Dealing with frustrated people all day is probably pretty frustrating too, especially when you don’t have the power to actually help them. I wish these people luck.

So, my final thoughts…the Acorns app was a good idea in theory, but it seems to be pretty terrible in practice. I hope this review helps a few more people avoid being sucked in. Since they’re really targeting beginners who don’t have much investment experience, I would hate for a bad Acorns investing experience to turn people off the stock market altogether.

Want better ideas on how to invest? As I mentioned above, I’d recommend Wealthfront for automated, hands-off investing. It’s where I keep my Roth IRA, and I’ve had no problems. It’s not exactly in the same category as apps like Acorns (e.g. they don’t have a round-ups feature), but it’s still very simple to use. For more on that and other options, check out my full article on how to invest without being a stock market expert.