Ksenia Yudina is the founder and CEO of UNest Advisers, a financial technology company that has developed the first app of its kind offering parents a flexible way to invest and save for their children’s future. The mother of three says her own children, ages 10 and 5 (twins), were the inspiration behind the inception of UNest. A financial adviser with 12 years of experience, Yudina wanted to “help other parents to save and invest for their kids’ future in the best way possible.”
After immigrating to the United States from Russia at the age of 18, Yudina put herself through undergraduate college and business school with zero financial support, graduating with more than $180,000 in student loans. Her own student debt, combined with her experience in the financial industry, sparked a desire to create a new savings option for parents. “I realized that investing for children is the number one [financial] priority of parents, even ahead of retirement, but there was nothing in the market that was simple and accessible for everyday Americans.”
ParentMap caught up with Yudina to learn more about UNest.
What is UNest?
If you think about other [mobile investment] solutions, Robinhood is there to help people make a trade, and Acorns is there to help young people get into investing. But there wasn’t anything for parents, so we ended up creating a mobile app to help parents get a plan in just five minutes — it’s super user-friendly, very simple and fast. Compared to financial advisers who usually charge sales fees and have a lot of hidden commissions, our fee structure is super transparent. It’s only $3 per month per child [in accounts up to $50,000].
Why did UNest move away from 529 accounts?
What we learned from our families during the pandemic is that people need flexibility. When education shifted online, a lot of people had this confusion and uncertainty: What happens if the cost of education is unsustainable? What happens if my child doesn’t go to college? What if they get financial aid and scholarships? It inspired us to envision another type of account called a UTMA — uniform transfer to minor account — which is a custodial account for kids that has much more flexibility.
What is the difference between a 529 account and a UTMA?
A 529 is a tax-free investment plan that you set up for kids, but you can only spend it on educational expenses, such as college tuition. The biggest limitation of a 529 is that if you end up not spending it on education, you lose all the tax credit and your earnings portion is penalized by 10 percent, a big downside for a lot of parents. A UTMA has much more flexibility. Like a 529 account, it has great tax advantages, but you’re not required to spend it on education; you can spend it on anything that benefits the child. Quite honestly, parents have different priorities for their kids — some want to pay for their first car, the down payment on their house or their wedding day. What is also interesting about a UTMA as compared with a 529 is that after the child reaches the age of maturity [between 18 and 25, depending on your state], the account actually transitions to the child, so the child becomes the owner of the account.
When do invested funds become available?
Parents can access the funds at any time, as long as they spend the money on something that benefits the child. Of course, we encourage people to think long term, because it’s an investment club and they have much more potential to grow funds if they invest long term, due to the compounding effect and tax benefits, but they don’t have to. If parents need to spend it on something in the interim, such as school or day care or whatever it is that they need for their child, they can.
Can gifts be made directly into a child’s UTMA account through the app?
We do give people additional ways to receive money in the account. One way is through the gifting feature we introduced, which allows parents to receive gifts from friends, grandparents and other family members; for example, on children’s birthdays and other holidays. Another way we help parents invest is through partnerships with brands like Uber, DoorDash and 1-800-Flowers.com. Every time the parents shop from a partner brand that they like, they earn financial rewards right into their child’s account, ranging from $5 to $100 per purchase.
Does UNest require parents to contribute to their child’s UTMA regularly?
The minimum investment is only $25 per month. We encourage parents to get on this monthly plan to get in the consistent habit of depositing money, because it creates discipline and the right financial habits, and it also helps to smooth out their return, so they don’t get to the market at the wrong time. If parents want to pause the plan at any time, that’s available; they just need to email our customer support.
What else should parents know about investing with UNest?
I would also say that the sooner parents begin saving, the better, but parents of older kids should know it’s never too late to open an account. Also, if parents are saving for their kids in a traditional checking account, not only are they not making money, they’re losing money due to inflation. That’s why I recommend parents use a tax-advantaged investment account — it has a much better potential for appreciation, and the tax savings result in additional advantages for parents.