Grifin may be the next WallStreetBets after a viral TikTok video sent it to the top of the iOS App Store — but experts warn against its model
Earlier this month, a new investing app called Grifin went viral on TikTok and shot to the top of the iOS App Store overnight. Launched in November and backed by $2 million in funding, the app aims to make the stock market more approachable by enabling its users to “magically invest $1” in brands that they’re already buying from.
“The moment you buy a cup of coffee at Starbucks, you get to invest $1 in Starbucks stock. You shop on Amazon, $1 goes to Amazon,” said Grifin co-founder and CEO Aaron Froug in the viral TikTok video, adding that the name stands for “The Greatest Revolution in Finances Now.” The video has been viewed around 14 million times.
Experts tell OneZero they do not recommend this approach to investing, echoing warnings from the GameStop and r/wallstreetbets saga about buying single stocks. And while Grifin is presented as free and simple, when they sign up for the app, users are actually getting into business with several financial institutions, hit with various fees, and giving up significant amounts of sensitive personal and financial data.
Unless you read to the bottom of Grifin’s website, it’s not clear that the $1 is a new charge on top of your purchases — it’s not simply folded into your transactions. Rather, the company withdraws $1 from your bank account whenever you shop at a brand you’ve selected and invests it for you automatically, which is already causing confusion among some users. (You can set monthly limits and turn off investments for companies you don’t want to invest in.)
“We are aware that some of the messaging used in our marketing has not made it clear that the $1 from each purchase is withdrawn from your bank account and invested in the stock,” Froug tells OneZero. “We are listening to the feedback and trying to update and clarify as we go.”
“I’m concerned about what happens once Grifin has the hard-earned cash of its users.”
In the company’s terms of service and 10 other user legal documents totaling over 80 pages, OneZero discovered that, among other fees, you’re charged an asset-based fee each month. This means the more you spend in your daily life, the more Grifin transfers from your bank account to your Grifin account — adding up to a bigger cut for the company.
The documents also state that by using the app, you’re legally appointing the company as your investment adviser and granting its “third-party providers the right, power, and authority to act on your behalf to access and transmit your personal and financial information.” Additionally, they clarify you’re actually buying fractional shares, which are nontransferable and don’t grant the shareholder any voting rights. The Advisory Agreement states that “trading in fractional shares has unique risks and limitations that…