Yesterday JP Morgan Chase announced they are offering free trades for their online brokerage customers. FREE! That’s great news, right? Of course it is, but there’s one small problem: they’re late. Really late.
According to the Wall Street Journal, the bank is trying to loop in millennial investors – but the reality is, many millennial investors are already hip to free trading platforms ( i.e. RobinHood app) and for the last several years have been happily investing for free.
Either way, better late than never! This is fantastic news, and here’s why:
The price wars have begun! As the current (older) investing population dies out, brokerage firms will now be fighting for new customers. That means lower fees as competition ramps up... and this is good for who? US!
I love that JP Morgan is listening and adapting to the new normal of what millennials are demanding for banking and investment products! And furthermore, I just love Jamie Dimon (Amazon Prime is his inspiration, so he's listening!)
And I REALLY REALLY love the synergy that forms from merging new ways of millennials with the expertise and robustness of traditional banks. For example, with the JPM brokerage, you'll get free trades, but you'll also get full access to their top industry research platforms (which is not available as extensively through the newer startup free trading apps). So traditional bank brokerage accounts still offer quite a few benefits that make them attractive tools to use.
So overall here’s my pros and cons, and overall opinion on this news:
Advantages for you:
If you are already a Chase bank account holder, this is a no-brainer. Get involved! I would 100% recommend it for several reasons:
Easier transfer of funds (some platform charge a fee for moving balances) and when you sell out of your investments, you don’t have to wait days for the transfer of funds for use.
Superior brokerage platform access -- i.e better tools for investment management, margin and borrowing (if you care), And access to extensive research (low key , a very clutch perk which I think is extremely underrated and underused by most individual investors)
Speed to market in trade execution ( some free trading apps like Robinhood – could take up to 5 days to buy stock, if the money needs to be transferred)
NO minimum brokerage balance requirements (THAT PART!)
100 free trades a year ( more than enough for the average modest investor!)
If you’re not already a Chase customer, this may be a non-factor for you (especially if you live in a geographical region where banking with Chase is not optimal). But definitely research other options -- i.e. Bank of America offers free trade perks as well ( depending on balance sizes)
Also, Read the Fine print – although the brokerage account does not require a minimum balance for free trades , it doesn’t mean their tradition bank accounts don’t. Do your due diligence.
Overall, this is great news. if you are already a Chase customer, get involved! I highly recommend looking into it.
Also, if your just starting out and looking for where to start. Check out my other posts highlighting the different brokerages, fees, pro and cons.