Charles Schwab (NYSE:SCHW)
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2 Months : From Sep 2019 to Nov 2019
By Lisa Beilfuss
Charles Schwab Corp. will let investors buy and sell fractions of shares in coming months as part of an effort to attract younger clients.
Founder and Chairman Charles R. Schwab told The Wall Street Journal Thursday that fractional share trading would soon be introduced, along with other several other new programs, as the online brokerage looks ahead after it eliminated trading commissions earlier this month. Mr. Schwab discussed the firm's future after speaking about his new book, "Invested," in New York.
"I wanted to take commissions out of the formula," Mr. Schwab said. "We've been on that path for 40 years," he said, reflecting back on the company's start as one of the first discount brokerages. Now, he said, Schwab is focusing on efforts to win business from young people.
The move would be the first by a major online brokerage to allow investors to buy and sell fractions of stocks. Some of the most well-known and popular companies have very high price tags, making owning a share impossible for some would-be investors. A share of Amazon Inc., for example, costs $1,792.
When Schwab said this month that it would nix trading commissions, it acknowledged competitive pressure from new entrants. Digital upstarts such as Robinhood Markets Inc. helped popularize the zero-commission model in the online-brokerage business, and some others have already allowed for fractional share trading. One such company is M1 Finance LLC, a Chicago-based online brokerage that splits every share into one-one hundred thousandth of a share.
Schwab didn't specify when the program would launch. "We're constantly working on new services designed to appeal to our evolving client base," a spokeswoman said.
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(END) Dow Jones Newswires
October 17, 2019 14:02 ET (18:02 GMT)
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