Executive summary
Fractional share trading has reshaped the US securities market since major brokers introduced the offering in late 2019 and early 2020. This innovation allows investors to buy less than a full share of stocks or ETFs, enabling participation with as little as $1. Fractional trading has drastically lowered entry barriers, especially for high-priced securities, fueling a wave of new retail investor engagement, portfolio diversification, and widespread adoption of long-term strategies like dollar-cost averaging.
Driven by commission-free trading and mobile platforms the benefits of fractional share trading are particularly pronounced among younger, tech-savvy investors, contributing to lasting demographic change in market participation. This initiative is a specific Broadridge offering available exclusively to clients on the BPS Canada platform.
Benefits
Fractional shares democratize investing by letting individuals allocate precise dollar amounts across multiple securities, and follow direct indexing strategies, regardless of share price, helping firms to attract younger less affluent clients early in their investment careers.
Fractional share trading promotes diversification, personalized portfolio construction, and the ability to fully deploy small investment sums, features now central to digital-first broker offerings.
Fractional trading is increasing in popularity as a standard feature that many broker dealers are implementing to stay competitive.
With the surge in retail investor participation and growing demand for affordable, flexible investment options, fractional trading is rapidly emerging as a key differentiator prompting broker-dealers to consider in their self-directed channels as a strategic move to stay competitive and relevant in a shifting market landscape.
