Schwab to Allow Trading of Fractional Shares: Report

Fractions of stocks could be popular with investors who, for example, cannot afford to buy a full share of Amazon stock, now trading at about $1,790.

The news prompted one industry observer to speculate what Schwab might do next. "This could also be the precursor to reducing the minimum for Schwab Intelligent Portfolios (currently $5k), which would allow them to compete against the likes of Acorns for smaller accounts," tweeted Ben Johnson, director of global ETF research for Morningstar.

In a recent interview with ThinkAdvisor, Schwab said zero commissions should benefit advisors. Those who "use Schwab and get the tremendous advantage of zero-commission transactions" will be "very competitive against the traditional firms who try to do investment banking, advisory [etc.] — it gets so conflicted."

When asked by ThinkAdvisor if it plans to allow both retail and advisory clients to trade share fractions, Schwab said in a statement: "We're always evaluating and working on new services to improve how people can invest, but we don't have anything specific to share on this right now."

— Check out Don't Ignore Threat of Free Commissions: Commonwealth Exec on ThinkAdvisor.