What You Need to Know:
Charles Schwab is making investing simple and accessible for all. The firm will soon roll out an offering called Schwab Stock Slices™ to let you nibble on stocks that you love.
If you’re on Schwab, you can utilize this feature by June 9th, according to the company.
That means that instead of forking over $100,000 or more for one share of Berkshire Hathaway A stock units, you can buy a small portion of it for a few dollars. The company notes, “investors can purchase a single stock slice or up to 10 different Stock Slices™ at once, commission-free – just like regular online stock trades at Schwab.”
Investors can buy a fraction of individual stock units of the major S&P 500 companies.
What’s Old is New Again with Fractional Investing
Charles Schwab is competing with younger and smaller firms like Square, Robinhood, Acorns, and others who have been in this sector for a little longer.
Competing might be overstating it as Charles Schwab has been in the facilitation and wealth management sector for quite some time now. The firm already has an installed base of users and can now offer this as another feature.
A feature like this lets those who are sitting on the sidelines to participate in the market with less at stake. Investors can have exposure while minimizing the chances of significant loss.
The idea here is to make stock investing as simple and as accessible as possible. Robinhood, Square, and other companies stick to this theme as their way into the hearts, minds, and bank accounts of the younger generation.
The strategy has worked out well as these firms are proliferating and rolling out new services to users.
Older firms such as Schwab see the growth that is present within this market and are taking actions to meet these market needs.
But if you become a client of Schwab with this feature, you don’t get surface-level data; you get much more. In addition to “bundles of stocks based on themes”, you can also tap into educational resources and other features that the firm offers to its clients.
Clients will have access to this feature in accounts such as “retail Schwab brokerage, custodial, and individual retirement accounts (IRAs), and clients using the service will be able to trade shares in real-time throughout the trading day using market orders.”
The giant financial services firm is betting that while the others offer convenience through mobile access and simple user interfaces, it can provide in-depth research and insights alongside simple features like stock slices.