Fidelity Rolls Out Fractional Share Trading for Advisors

Fidelity Institutional, which serves wealth management firms and other institutions, has started rolling out fractional share trading for stocks and ETFs to advisors this month.

The new capability allows advisors to offer proprietary strategies to a broader set of clients, including younger clients, at lower minimums, and helps advisors build more customized portfolios based on clients’ needs and desires.

In addition, said Fidelity, fractional trading makes it easier for advisors to address tactical situations such as raising cash from high-priced securities or reducing concentrated positions in similar securities previously bought at a low price and subject to large capital gains when sold.

“With our industry offering more personalization for investors, advisors have been looking for a way to more finely tune investor portfolios,” Ryan Plotner, head of Transaction and Banking Solutions at Fidelity Institutional, said in a statement. “With fractional share trading, we’re now giving advisors the ability to address that challenge.”

The new trading capability for advisors builds on the firm’s fractional share offering for retail investors, known as “Stocks by the Slice,” introduced last January. That successful offering set the stage for Fidelity to offer the same capability to advisors investing their clients’ assets, according to Fidelity.

Fidelity said fractional share trades are available through Wealthscape, its advisor technology platform, must be market or limit orders, and are good for one day only. Fidelity will execute all fractional share trades in real time during market hours, unlike some firms that execute such trades at the end of the trading session or wait until multiple orders add up to full shares.

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