Fidelity's Assets Hit $3.3T on Trading Surge

Fidelity Investments says its discretionary assets reached $3.3 trillion as of June 30, up 15% from last year. Its assets under administration jumped 8% to $8.3 trillion.

Trading by Fidelity investors more than doubled from the year-ago quarter, growing 106%, to hit 2.3 million daily average trades (or DATs) in the second quarter. Share volume grew 134% to an average level of 671 million per day, as the equity markets improved from earlier in the year and investors took advantage of more time at home to jump in.

Rival broker Charles Schwab had assets of $4.1 trillion in the second quarter. It is set to merge with TD Ameritrade, which had $1.5 trillion in assets in Q2'20, by year-end.

TD Ameritrade's DATs were about 3.4 million in the same period, up over 300%, while Schwab's grew 126% to roughly 1.6 million.

Investors opened close to 1.2 million new retail accounts with Fidelity in the most recent quarter, and 1.6 million households did some planning work with the firm in Q2, up 24% from the prior year.

"New customers came to Fidelity in record numbers in Q2 because they want to work with a company they can count on to deliver expert planning and guidance, " the firm said in a statement.

The update on Fidelity's business came a day after trading app Robinhood received $200 million in funding from D1 Capital Partners, putting its valuation at $11.2 billion. It does not disclose its assets but said it had some 13 million users in May.

Fidelity says it is working with some 32 million investors with more than 75 million accounts as of June.

Meanwhile, Bank of America said last week that volume on its Merrill Edge self-directed platform grew 180% in the second quarter; some 330,000 new accounts have been opened this year, and assets are nearing $250 billion.

Hiring Spree

Fidelity, which is privately owned, hired more than 2,000 people last quarter to meet rising demand. The new staff include financial consultants and customer service representatives.

The firm says it lowered minimums in its separately managed accounts to $250,000 from $500,000, and also launched eight mutual funds and a commission-free suite of active equity exchange-traded funds in Q2'20.

Meanwhile, Robinhood also intends to hire "hundreds of additional registered financial representatives in Southlake, Texas, and Tempe, Arizona," according to a blog post published Monday.

— Check out What to Tell Clients Tempted by 'Davey Day Trader' on ThinkAdvisor.