Shares of Charles Schwab fell 4 percent, TD Ameritrade fell 6.7 percent, E-Trade fell 4.8 percent and Interactive Brokers fell 3.1 percent in premarket trading. The move by J.P. Morgan aggravates a cold-blooded price war, with the globe's largest managers fighting for clients with low-cost options. J.P. Morgan will launch its new service next week.
- J.P. Morgan’s new digital brokerage service comes with free trades, portfolio building tool and access to equity research.
- The bank’s new trading service starts next week and will be available to its 47 million mobile or online users.
- All customers get 100 free stock or ETF trades in the first year. Those with Chase Private Client get unlimited trades.
- CEO Jamie Dimon hinted at this move in 2016, citing Amazon Prime as his inspiration.
The move, more than two years in the making, instantly intensifies the price war that is occurring throughout the investing landscape. Whether it’s executing trades, managing portfolios or simply owning mutual funds and ETFs, costs have been collapsing on Wall Street. Among brokerages, the free trading app provided by Robinhood Markets has gained attention recently for attracting more than 5 million users, and a $5.6 billion valuation, in just a few years.
J.P. Morgan, the biggest U.S. bank, has a distinct advantage over many competitors: It already has financial ties with half of American households. When its engineers flip a switch in coming days, more than 47 million people who already use the company’s banking app or website will gain access to the new service, called You Invest.
“There are customers out there who may not want to trust their credentials or their money to an app of the month,” said Jed Laskowitz, a J.P Morgan veteran who runs You Invest. ”We’re thinking about what’s right for our customers, helping them get invested, and stay invested and diversified. ”
