The biggest U.S. bank is joining an escalating battle for retail investors.
JPMorgan Chase & Co. is planning to roll out a mobile brokerage platform next week that includes free research and some free trading to its millions of retail customers. The news comes after Fidelity Investments cut fees to zero on two new index funds earlier this month and Vanguard Group said in July it would offer almost 1,800 exchange-traded funds commission-free to online customers.
Fintech startups, technology-assisted robo-advisers and increased competition from established players have driven a dramatic drop in brokerage fees across the industry. Many firms are now using cheap or free trading to attract clients to more profitable businesses such as financial advice and higher-priced investments.
At JPMorgan, the idea for the disruption has been in the works since 2016, when Chief Executive Officer Jamie Dimon told investors the bank was working on a way to offer free robo-investing.
The bank is hoping to lure retail customers from competitors, encourage existing clients to start trading more on their own and appeal to millennials, Jed Laskowitz, the CEO of the new product known as You Invest, said in an interview.
“We were hearing from clients that they wanted to invest with us as they digitally banked with us,” Kelli Keough, the bank’s global head of digital wealth management, said in an interview. “It really came from clients and was a concerted focus across the organization to make this happen.”
The service gives clients 100 free trades in the first year, free equity research and the ability to earn unlimited free trading, Darin Oduyoye, a spokesman for JPMorgan, said Tuesday in an emailed statement.
Clients can get the 100 free trades every year if they maintain an account balance above $15,000, Oduyoye said in response to questions. Chase Private Client customers, or those with at least $250,000 in balances, get unlimited free trades, he said.