FinTech News
SoFi Launching Alternative Investments Feature
A FinTech brokerage is bringing more investment options to its platform.
About the feature:
SoFi has announced that alternative investments will soon be offered as part of SoFi Invest. These include the ability to invest in commodities, pre-IPO unicorns, private credit, and more.
According to SoFi, they’ll begin by offering more than 6,000 mutual funds. Plus, customers will be able to invest in ARK Venture Fund, Carlyle Tactical Credit Fund, and the KKR Credit Opportunities Portfolio as well as Templeton’s Clarion Partners Real Estate Income Fund and Franklin BSP Private Credit Fund. Access to these investments will roll out to SoFi Invest members “over the coming days.”
To celebrate the launch, for the first 60 days, members will be able to invest in mutual funds with no SoFi transaction fees and in alternative funds with no transaction fees. However, after that, a 0.50% purchase fee will apply to alternative investments. Note that funds may charge front-end load fees, back-end load fees, contingent deferred sales charges, or other expenses. Additionally, minimum investment amounts may vary by fund.
SoFi’s alternative investment platform will also feature an educational hub. Topics covered will include the basics of alternative investments, how they fit into a balanced portfolio, and more. These educational resources will be available to the public — not just SoFi users.
What they’re saying:
Announcing the new feature, SoFi CEO Anthony Noto said, “Our goal at SoFi is to empower our members to get their money right so they can achieve financial independence. We know investing is critical to building wealth, but many investment vehicles are still not accessible to everyday investors. Introducing access to alternative investments continues our focus of offering access to investments that are usually reserved for the ultra wealthy, and allows us to provide our members with even more choice and flexibility when it comes to investing their hard-earned money.”
My thoughts:
Introducing alternative investments to SoFi is certainly an intriguing move and helps the platform stand out from some other FinTech brokerages such as Robinhood. Speaking of Robinhood, seeing as they and SoFi have often launched features around the same time (see: IRA matching, IPO access, etc.), one can’t help but wonder if Robinhood might follow suit. At the same time, given the fees inherent to these types of investments, the rival company may be a bit more shy about trying to work these options into their largely fee-free platform.
In any case, it will be interesting to see how SoFi Members utilize these new investments and whether other brokerages will bring them to their apps as well.
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