I just came across this start-up, SparkGift, which allows you to give gifts of stock and index funds to friends and family. Here is a summary of their offering from their website:
Teach someone about investing
Many people don’t have a savings or investment account. Traditional financial firms can make investing complicated. Spark makes investing simple so that young investors can learn the value of investing early and experienced investors can receive gifts that grow their portfolio. A gift can empower someone’s financial future.
Send a stock gift certificate in under a minute
There’s no need to fill out long forms, sign papers, or mail checks. You choose a stock or fund and pay. We create a gift certificate with your choice of stock and fund and deliver it to the recipient. It only takes a minute to give an investment that can last a lifetime.
Start gifting stock for as low as $20
With SparkGift you can give fractional shares of stocks and index funds. SparkGift charges a flat $2.95 gifting service fee for gifts up to $100, and a 4% fee for gifts above $100. All it takes is a Spark.
So, my first thought was “Wow, what a great idea!” My second was, “What about fees?” $2.95 seems reasonable for handling all the headaches that come from purchasing fractional shares and then setting up a custodial account (if gift recipient is under 18 or 21, depending on state).
I am looking forward to having the CEO and co-founder, Peggy Mangot on my podcast show shortly and learning more about how this gift of stock can educate young people about investing in the stock market. Stay tuned..