Can Teens Open Investment Accounts for Their Parents?

As our parents get older or start dealing with health issues, it’s natural to want to step in and help—especially when it comes to managing their money. Over time, more and more teens and young adults find themselves wanting to assist a parent who may not be confident with online investing or just doesn’t have much experience with retirement planning.

However, there’s an important legal line you can’t cross, no matter how good your intentions may be—you can’t open or manage an investment account for someone else without the proper authorization. Financial institutions require authorizations such as a power of attorney (POA) or a joint account to establish legal responsibility for the account—and to protect against fraud or misuse. The good news? The best online brokers make the process pretty smooth, offering step-by-step tools, downloadable forms, and clear educational resources so you can get everything set up easily and legally—from the comfort of your own home.

Can Teenagers Open Investment Accounts for Their Parents?

No, teenagers can’t legally open investment accounts for their parents, at least not directly. To open an investment account, you typically need to be a legal adult (18 or older). Even then, you can’t just open or manage an account for someone else without their authorization.

If you’re a teen or young adult wanting to help your parents with investing, there are several ways to do this.

• Research investment options.
• Explain how certain planning tools, screeners, and charts work.
• Walk them through how to navigate and utilize their online platform dashboard.

Age and Legal Capacity: The Basics

In most states, 18 is the age of majority, the legal age required for entering into contracts. This applies to opening a personal account for yourself or managing an investment account for someone else. Until that age, teens are legally minors, which means they can’t sign binding financial agreements or act on behalf of another adult in any official capacity—financially or otherwise.

However, once you turn 18, opening a joint brokerage account with a parent is an option. Just remember, it comes with shared access and shared tax liability, which need to be considered carefully. Some types of accounts allow parents to name a trusted contact person or beneficiary, which doesn’t grant control but can help in emergencies or after death. To gain full authority over someone else’s investment account or make decisions for them, establishing a power of attorney would be required.

So, What Can a Teenager Do to Help?

When you may still be too young to open or manage investment accounts for your parents, there still are several ways to help. One of the best things you can do is simply start the conversation—ask your parents how comfortable they feel with their investments or if they’d like help understanding their options. Sometimes just opening the door to that discussion is enough to get the ball rolling.

From there, you can assist with research, compare investment platforms, or even sit in while they set up an account. Many older adults appreciate having someone walk them through unfamiliar technology or explain investment terms in simpler language. You might also recommend robo-advisors, such as Betterment or Wealthfront, which can suggest and automatically reallocate investments to keep a portfolio on track. 

The automated wealth management functionality offered by robo-advisors is especially helpful for a parent who wants rebalancing and other portfolio decisions to be on autopilot. Or, if your parent wants to take a more active approach, opening an account with Fidelity or Charles Schwab is great for beginner investors. You don’t need legal authority or to be a part-owner of the account to be a trusted guide and a sounding board for advice for your parent.

What if You’re 18 or Older?

Once you turn 18, you can open your own investment accounts and enter financial contracts legally. However, you still can’t open an account in someone else’s name without their consent or proper authorization. If you are going to manage an account for your parent, you need power of attorney, which allows you the same access and decision-making as the account owner. You can open or close the account, choose investments, and move funds around on their behalf. 

Another option is a joint brokerage account, which gives shared access but also means shared tax liability. Some brokerages offer limited trading authorization, which allows you to act on behalf of your parent regarding decisions about the account, but does not allow for the disbursement of account funds. Another option for you is to become an authorized user, giving you limited control and access without full account ownership.

The Bottom Line

Supporting your parents with their investments can be a great way to help them, especially if they’re aging or unsure about financial options. If you’re under 18 (or slightly older in a few states), you can’t legally open or manage accounts, but you can still be involved by helping with research or guiding them through online platforms. Once you reach adulthood (18 or older), you have more options, like becoming a joint account holder or using a power of attorney, but you must have proper legal authority. Regardless of your level of involvement, it is important to respect boundaries, stay informed, and keep the communication lines open.