U-Nest, a new fintech app designed to help parents save and invest money so their children can go to college, is set to launch Tuesday after weeks in beta.
Ksenia Yudina, who formerly worked in private client at Capital Group American Funds, a large provider of 529 college savings plans, said she was motivated to create the app after friends approached her for advice on how to save for their kids' futures.
“I would say: 'OK, here’s a 16-page financial application. Fill it out and fax it back,' " Yudina said. “They would say: 'Oh my gosh. This is not how to do things.' They all use online banking and Venmo.”
Yudina started researching how much consumers know about college savings plans.
“Student debt is such a problem in the U.S.,” she said. “I realized 70% of people don’t even know about 529 savings plans. People who know are put off by the complexities associated with the process.”
In a 529 account, the growth of the account and withdrawals are tax-free. “The irony is not that many people know about it, unless they are wealthy and have access to financial advisers,” Yudina said.
She opted to try to simplify the process of getting and managing such accounts with the use of technology, modeling her efforts after other fintech apps like Robinhood and Acorn.
She took six months to create an app that lets people create a 529 savings account, recommends a portfolio for them and provides access to balances and transactions. The app has a college cost calculator that projects what the type of university will cost, and lets the parent allocate how much they want to save per month. It sets up automated recurring deposits into the 529 account and allows for additional deposits as well.
Yudina’s company, U-Nest, tested the app with a beta group. Soon it will roll out an “influencer” feature through which users who agree to be ambassadors for the product, posting about it on Instagram, get extra $25 deposits.
U-Nest is registered as a financial adviser with the Securities and Exchange Commission and the Financial Industry Regulatory Authority. The investment management firm Invesco manages the 529 portfolios. “We play the role of financial adviser — educating people, making the sign-up process easy, making sure everything is working properly behind the scenes,” Yudina said.
In the future, she hopes to expand into retirement accounts, life insurance and mortgages.
“My initial idea is, let’s focus on the biggest pain point for parents who care about their kids’ future and who have been burned by student loans themselves, and then introduce other solutions for them,” Yudina said.
Yudina also hopes to introduce a feature that lets friends and family contribute to the child’s account on birthdays or holidays.
