Retail investors pile into Fidelity as accounts surge 17% to 26M
Mar. 03, 2021 7:28 AM ETRobinhood Markets, Inc. (HOOD), SCHW, IBKR, MS, SOFI, SQHOOD, SCHW, IBKR, MS, SOFI, SQBy: Yoel Minkoff, SA News Editor34 Comments
- Here's another statistic showing the retail investor surge that's hitting the market. Fidelity's retail accounts totaled 26M in 2020, up 17% from a year earlier, while daily trading volume doubled.
- Driving the trend was the rest of the brokerage industry dropping commissions to zero, which attracted a new generation of investors into the market. Brokerages were also bolstered as more people stayed at home due to COVID-19.
- "It's tough to find any silver linings from a pandemic year, but the increases in customer volumes pushed us to move faster in areas that were already long-term priorities," Abigail Johnson, Fidelity's chairman and chief executive, wrote in her annual letter.
- Despite the massive growth, Fidelity's annual revenue inched just $100M higher than its 2019 total of $20.9B. While low- or no-cost accounts don't help short-term profit margins, brokerages are hoping their new customers will turn to them for more lucrative services like financial advice.
- Last week, Morgan Stanley CFO Jonathan Pruzan said daily trading activity on the E*Trade self-directed online trading platform is "off the charts."
- Related brokers: Robinhood (RBNHD), TD Ameritrade (NYSE:SCHW), Interactive Brokers (NASDAQ:IBKR), Charles Schwab (SCHW), E-Trade (NYSE:MS), SoFi (SOFI) and Cash App (NYSE:SQ).