TrustEgg enables parents to easily create a free trust fund for their child. All deposited funds are placed in a custodial account. Money is held in the child’s name and legally secure until the child’s 18th birthday. Parents can also use TrustEgg to invite family and friends to make contributions.
More than twenty YC-funded companies are involved in financial services and payment processing, which includes TrustEgg. Companies in this market tend to be heavily regulated. My previous post was about FundersClub, recently recognized by the SEC as the first online venture capital firm. TrustEgg, like FundersClub, had to go through government red-tape just to guarantee its business is even legal. TrustEgg went through YC W11 with the initial plan of becoming its own chartered trust company. To date, TrustEgg is still attempting to solve the issues of becoming its own chartered trust company. TechCrunch’s Sarah Perez writes that TrustEgg has only very recently been able to launch, by operating as a licensed product of existing trust company Summit Trust.
Gaining consumers’ confidence in an unproven startup’s ability to manage their family’s long-term savings seems like a major challenge. TrustEgg will need to make earning and maintaining client confidence a fundamental part of its business in order to succeed. However, providing the middle class with better ways to save their hard-earned money than a mere savings account certainly sounds like a good idea.