Advisors Will Be Able to Build a Diversified Portfolio of Stocks and ETFs for their Clients Based on the Dollar Amount They Want to Invest
Fidelity Institutional®, the division of Fidelity Investments dedicated to providing technology, solutions and insights to wealth management firms and institutions, has announced that it will launch real-time fractional share trading for stocks and ETFs for wealth management firms. The new capability, which allows advisors to build portfolios for their clients based on the amount they want to invest, is beginning to roll out immediately to Fidelity Institutional clients. Offering fractional share trading to advisors is the first step in enabling them to offer proprietary strategies to a much broader set of clients, including the next generation of investors, at lower investment minimums.
“With our industry offering more personalization for investors, advisors have been looking for a way to more finely tune investor portfolios,” said Ryan Plotner, head of Transaction and Banking Solutions at Fidelity Institutional. “With fractional share trading, we’re now giving advisors the ability to address that challenge.”
Fractional share trading also enables advisors to better serve clients with tactical situations; for example, raising cash from a security with a high share price or reducing concentrated low-basis positions in similar stocks. Fidelity will execute all fractional trades in real-time during market hours, meaning advisors and their clients will always know the share price, unlike some firms that execute fractional trades at the end of a trading day or wait for multiple orders to add up to full shares.
Fractional share or dollar-based trades, which must be market or limit order types and are good for the day only, are available through Wealthscape. This capability for advisors expands on Fidelity’s Stocks by the Slice offering for retail investors which was launched last year. Fidelity invests billions of dollars annually in its technology enterprise-wide, leveraging its scale to develop new capabilities that help meet the distinct needs of each of its customers. “Fidelity is building on our significant experience and proven success in the trading space with this new offering, which will make it easier for advisors to efficiently invest their clients’ assets,” continued Plotner. Fidelity Institutional is beginning to roll out fractional share trading to advisors immediately. For more information, advisors can contact their Fidelity relationship manager.