- Thomson Reuters
- JPMorgan is taking the plunge into the world of low-cost stock trading, according to a CNBC report.
- JPMorgan has been rolling-out a number of services to target younger investors. That puts it in direct competition with startup firms like Robinhood.
JPMorgan is taking the plunge into the market for low-cost stock trading, another sign the investing giant is going after the business of younger, sexier startup firms like Robinhood.
The New York-based firm is launching its new investing app next week, according to a CNBC report. The new app would offer discounted stock trading, a portfolio-building feature, and access to the investment bank’s research
Customers who download JPMorgan’s banking app can get 100 free trades in the first year.
Across the brokerage industry, firms have been under pressure to lower cost amid rising competition. Notably, California brokerage Robinhood pioneered free stock trading, forcing establishment firms like Fidelity and TDAmeritrade to slash their pricing. Most recently, Fidelity announced no-fee index funds.
News of JPMorgan’s new app wiped out $5.5 billion in market cap of the biggest online brokers on Tuesday morning with Charles Schwab and TD Ameritrade seeing the biggest impact.
Large firms like JPMorgan have also been encroaching on Silicon Valley’s turf, offering more services that target millennials and inexperienced investors. Meanwhile, financial technology firms such as Robinhood and Betterment have been rolling out more advanced services to target wealthier clients. Robinhood, for instance, launched multi-leg options and Betterment, which had been the poster-child for automated investment advice, rolled-out a portfolio coupled with human advice.
JPMorgan has already taken a big step towards winning over the hearts of younger Americans with a new branch-less banking service, Finn. And the app’s autosave functionality mimics the key features of investing startup Acorns and Stash.
JPMorgan CEO Jamie Dimon has said he looks to Amazon and its Prime business as inspiration for its banking efforts.
Devin Ryan, an analyst at JMP Securities, said JPMorgan’s recent moves shows that startups aren’t immune from big banks copy-catting and then improving upon services they pioneered.
“The best features that are getting launched today are being replicated in some cases by the incumbents,” Ryan said. “And in some cases the incumbents are launching them on their own.”