Financial Start-Ups Aim to Court the Anti-Finance Crowd, William Alden, New York Times, December 22, 2014

Profit is usually a top priority on Wall Street, but some of the latest ventures into finance by start-ups seem to be inspired more by Karl Marx than John Pierpont Morgan.

A number of new financial start-ups are trying to reach younger and middle-class Americans by upending the customary fee structure of traditional brokerage firms and money managers. They are backed by deep-pocketed venture capital investors — and even celebrities like the rapper Snoop Dogg — who are wagering that these upstarts can challenge the Wall Street establishment.

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Robinhood, a new brokerage firm based in Palo Alto, Calif., whose founders were inspired by the Occupy Wall Street movement, introduced an app this month that lets customers trade stocks without paying commissions. (The firm plans to make money by offering margin loans and by collecting a portion of the interest earned on customer money invested in money market funds.)

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Some industry experts have voiced skepticism about the viability of the new business models, including those of Aspiration and Robinhood. But venture capitalists have been happy to bet that technology-focused start-ups can offer more appealing products for buying stocks or managing savings.

North Carolina’s Outrageous Abortion Requirement Is Struck Down, Dahlia Lithwick, Slate, December 22, 2014 Continue reading →