Fidelity claims the sub-Robinhood segment for itself (among majors) by offering

Brooke’s Note: My dumbest financial mistake before I turned 18 was buying a Honda Trail 90 motorbike from a local clam digger, Karl, in Maine. I was 14. I took most of my savings of every $20 dollar check at Christmas or birthday and money my mother put aside for me. I plunked it right down. I’ll never forget Karl’s closing sales pitch: “And if you shoot a deer way out in the woods, you’ll be able to drag it back.” I had already decided before that line of choice salesmanship. I suppose I wasn’t very financially literate, Yet even today, not much in the investment and advice business makes my mind enter a fugue state faster than introduction of the term ‘financial literacy’ into conversation. Get it out of here. So I commend, I think, the fact that if Fidelity is going to offer ‘youth’ accounts that it includes a way for kids to invest — and lose — their own money with little parental involvement. Nobody learns much from success or from reading about it. I ended up riding that motorbike a few times before it wouldn’t start and my father, an orthopedic surgeon, liked it that way and wouldn’t help get it fixed. It sat there for multiple decades before my mother gave it to a friend’s son who was cleaning out the garage. He got it fixed and gave it to his sister who has been using it to commute to work in Bethel, Maine. It was a happy ending. But I vowed not to be careless with money, again. I still ache a little when I think of that 1977 splurge of my $350 of savings.

Fidelity Investments is launching a bold get-’em-while-they’re-young marketing strategy that lets 13- to 17-year-old children open their own “youth” accounts, and making it automatic that they’ll stick around once they turn 18. 

For now, Fidelity bars RIAs from using the youth accounts on behalf of their investors through institutional accounts, but they can do a work-around using the retail platform.

The Boston investment giant claims it’s the first to introduce minor teenagers to zero subscription fees, zero account fees, zero minimum balances, zero domestic ATM fees and zero online commissions. 

The major full-service online brokerages got a wake up call last year from no-frills online rival Robinhood, which saw exploding growth among young, “Gen Z” investors.  

“There’s a rush for customer acquisition at younger and younger ages, in part, because Gen Z has both fintech and crypto solutions at their fingertips,” says Lex Sokolin.

“Teen focused neobanks like Step are [also] growing meaningfully,” he adds. 

Calling the shots

Fidelity may be angling to beat Robinhood to the punch for young investors with its so-called “Fidelity Youth Account.”

Since it’s illegal in most states for anyone under 18 to open a banking or brokerage account, Robinhood only targets investors 18-years-old or older.

But adult Fidelity account holders can open youth accounts for minor children. They can maintain oversight, but not control, according to Fidelity’s website. 

“We believe the broadest features that set us apart are the teen not needing the parent’s OK before they make a spending or investing decision, and no fee,” says Beauregard.

Beauregard’s boast is correct, but only to a point. 

Parents can only monitor account activity online and through monthly statements, trade confirmations and by viewing debit card transactions. Parents can also set up alerts to notify them of…