By Amelia O’Rourke-Owens

Congress’s new Section 530A “Trump Accounts” have been promoted as a way to build wealth for the next generation. The idea is straightforward: give every eligible newborn a federally-funded investment account and the next generation, through its universal equities ownership, will build financial capability and investment in America’s capitalist marketplace.

There is good reason to believe that early asset ownership can improve long-term outcomes. It’s a proposition well-supported through the research of Drs. Michael Sherraden, Margaret Clancy, William Elliott, Jin Huang, and others. Three decades of research on Children’s Savings Accounts (CSAs) has found that children with dedicated savings are more likely to develop college expectations, enroll in higher education and accumulate assets as adults.

But the success of this child investment initiative will depend on how children experience investing. And we have some runway before we know what that will look like.

Here’s what we know today: the creation of Trump Accounts brings to the national stage the concept of child wealth development and demonstrates that the American government can legislatively create both cash-transfers and asset-building opportunities for children. The $1,000 pilot contributions to children born between January 1, 2025 and December 31, 2028 may well offer a wealth-building opportunity to children whose families have no resources to save, but there are serious structural risks tied to design, implementation, and behavioral exposure.

First, there’s a baseline risk these accounts will not even reach the children for whom they would be most beneficial. The lack of automatic enrollment could exclude the poorest children or eligible children in the foster care system from the $1,000 contribution.

Then, there’s the concern over how the Trustee, Robinhood, will administer these accounts. If Robinhood’s Trump Accounts app is similar to its own proprietary website and app, then Trump Accounts’ user interface will gamify finance in a manner that could cause financial loss to young adults.

While investment participation is distinct from gambling, research demonstrates meaningful overlap in risk perception, reward sensitivity, and impulsive financial decision-making. “Gamblification” associates the act of trading with celebration, which can effectively encourage “users to trade more frequently, prioritizing the excitement of the platform over sound financial decision-making.”

Further, Robinhood offers a “prediction” product, which is distinguishable from gambling only in law. The Prediction Markets page has featured bets and an endless list of speculation topics available to users including on sports, climate, elections, entertainment, and technology, among others. Users can purchase a quantity of “Yes” or “No” buys at an asking price, have an estimated cost which includes commissions and fees, and then a payout if the buy is correct. If this functionality is imported into Trump Accounts apps, then the Trustee of Trump Accounts may place Trump Account beneficiaries at higher risk for access to betting opportunities, an addictive and risky behavior, and the same goes if adult custodians are encouraged to create their own Robinhood accounts. On a national scale, the legalization of gambling and betting may reflect a broader cultural normalization of risk-oriented financial behavior, which is thus not a unique risk to Robinhood.

When the strict prohibition on distributions from Trump Accounts are lifted, will young adults be able to use their Trump Accounts to engage in speculative trading or gambling-like financial behavior?

Finally, there’s the stated goal for Trump Accounts to build financial literacy among the next generation: as children get older, “they’ll learn about investing and watch their money compound in real time. They’ll gain more than just money. They’ll gain financial literacy,” TrumpAccounts.gov states.

Yet exposure has not yielded higher competency or better financial outcomes for retail investors to date. Robinhood’s ease-of-use combined with the equity and options trading it encourages has introduced a new generation to the market, but “without much in the way of additional education.” Depending on how its built, the Trump Account trustee may unintentionally expose beneficiaries to—or even normalize—financial environments characterized by volatility, speculation, and loss.

Robinhood’s platform encourages individual trading—probably in part because of its reliance on “payment for order flow”—despite most long-term assets in America being held in mixed-risk or institutional investor-created funds.

Beyond painting an inconsistent picture for young Americans of how a majority of Americans hold and own their investment assets, Robinhood offers substantially more advanced—or risky—products, such as futures and options, purchasing venture fund shares, secured loans, and crypto trading.

While we still have runway before the first Trump Account funds become unlocked for beneficiaries, government should ask whether a gamified interface actually aligns with the objectives of a federally supported child wealth-building program.

This is why the government’s choice of financial intermediaries deserves close scrutiny and constructive feedback. A federal child investment program should introduce young Americans to the disciplines that have historically created wealth: diversified portfolios, compound growth, and patience.

None of this requires Congress to repeal Trump Accounts, nor does it require excluding private financial firms from participating.

It simply requires that we acknowledge that the implementation of Trump Accounts is still a work in progress, and one that requires our close and thoughtful attention. Treasury should establish meaningful consumer protection standards, strengthen participating financial institution oversight, and restrict the ecosystem of products and services offered via Trump Accounts. Features, tools, and platforms should be based on whether their design advances the long-term purposes of the program. The government should also commit to studying investor behavior over time so that future reforms are informed by evidence rather than assumptions.

If the Trump Accounts program succeeds, then eight to seventeen years from now the program will have taught an inclusive, new generation of children how to become investors. If it fails, it will be because it taught them only to become traders.

Amelia O’Rourke-Owens is an attorney, policy advisor, and consumer protection expert.