Transitioning from a lifetime of relentless accumulation to active decumulation is one of the most counterintuitive milestones in personal finance. For decades, investors have been
Preparing the Next Generation of Investors
Published Date : October 27, 2026
Two cornerstones of adulthood are personal autonomy and financial independence. As the parent of a young teenager, I’m often struck by the fact that my daughter seems to have ever more of the former, but none of the latter. Honestly, this is as it should be, as I’ve made it clear that her “job” at this stage of life is to do her best in school. As we’ve talked over the years, she knows that supporting herself will come later when she has a job, and not likely all at once. She even understands the power of saving and some of her Christmas and birthday money is often tucked away to make a thoughtful larger purchase later. The next logical step for me, as her financial advisor mom, was to introduce her to investing. But how?
Until recently, there haven’t been any great options for introducing teens to finance and investing in any meaningful way. As legal minors, they’re unable to open a brokerage account on their own and simply opening one for their benefit (like a trust or UTMA) and telling them about it or even showing them what you’ve done on their behalf, misses the point. (Anyone who has talked to their teen knows this!) The best way to learn is by doing. Charles Schwab and Fidelity Investments have now made this possible with the launch of a new account type specifically for teens aged 13 to 17 and their parents. Schwab calls their offering the Schwab Teen Investor™ account and Fidelity has branded theirs a Fidelity Youth® Account.
While targeting the same market for their products, there are some key differences between the two accounts. At Schwab, parents and teens share the account as co-owners, so either can place trades or make cash withdrawals. At Fidelity, the assets are solely owned by the teen and, therefore, only the teen can place trades or make cash withdrawals. The investment options for both are slightly different and should be reviewed together before opening an account, but both custodians allow for purchases of U.S. equities, ETFs, and mutual funds, allowing for the build-out of a diversified portfolio if desired. Both offer a mobile app and the option to add a debit card, giving teens an even greater sense of being on the path to adulthood. Most important of all, though, are the parental control features of both accounts.
It was Benjamin Franklin who said, “Tell me and I forget. Teach me and I remember. Involve me and I learn.” These words ring especially true when it comes to teens. With the hands-on experience of their own brokerage account, teens have the potential to learn some investment basics and make some mistakes when the stakes are low—and mom and dad are still right there to provide guidance. This type of account could be a good first step for families who’ve created a trust or a custodial account that will ultimately be turned over when the teen is a young adult. And you never know, your teen investor could be the next Warren Buffett.
Sources: Schwab.com and Fidelity.com
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