Fidelity Institutional, which serves wealth management firms and other institutions, has started rolling out fractional share trading for stocks and ETFs to advisors this month.
The new capability allows advisors to offer proprietary strategies to a broader set of clients, including younger clients, at lower minimums, and helps advisors build more customized portfolios based on clients' needs and desires.
In addition, said Fidelity, fractional trading makes it easier for advisors to address tactical situations such as raising cash from high-priced securities or reducing concentrated positions in similar securities previously bought at a low price and subject to large capital gains when sold.
"With our industry offering more personalization for investors, advisors have been looking for a way to more finely tune investor portfolios," Ryan Plotner, head of Transaction and Banking Solutions at Fidelity Institutional, said in a statement. "With fractional share trading, we're now giving advisors the ability to address that challenge."
