Dive Brief:
- TD Ameritrade said that retail investors are embracing mobile usage with a record 22% of securities trades being sent through a wireless device during the January through March period this year, according to a company news release. The online brokerage firm estimates daily mobile users will grow 19% from a year earlier to 302,000 during the second quarter.
- Mobile is especially popular with millennials, with 42% of the demographic group using a wireless device to place orders, Victor Jones, director of trading for TD Ameritrade, said in a statement.
- Snap Inc.'s initial public stock offering on March 2 was a record-setting day for mobile trading, TD Ameritrade said. A record 24% of total orders came from a mobile device, and the brokerage saw 5,400 new users, when it adds 2,700 a day on average.
Dive Insight:
Jamie Dimon, the president and chief executive officer of JPMorgan Chase, last month said a currency trader at the bank placed a $100 million foreign exchange trade through a mobile device. But why should institutional investors have all the fun? As TD Ameritrade demonstrates, retail investors are moving onto mobile platforms in a big way, particularly those from younger generations that are entering the workforce and starting to build a nest egg.
Mobile trades have more than quadrupled in the past five years, and the trend is likely to persist given that investors want time-sensitive transactions like securities trades to be handled immediately. Banks and brokerages like TD Ameritrade recognize the trend and are adding functionality to mobile apps so that investors can monitor markets, research stocks and execute trades.
As brokerages continue to undercut each other's transaction fees, a major way to differentiate themselves is with the capabilities of their apps. TD Ameritrade found that 13% of its clientele uses a mobile app exclusively for securities transactions, highlighting the need for financial services companies to provide a range of services through wireless devices.