KEY POINTS
  • J.P. Morgan's new digital brokerage service comes with free trades, portfolio building tool and access to equity research.
  • The bank's new trading service starts next week and will be available to its 47 million mobile or online users.
  • All customers get 100 free stock or ETF trades in the first year. Those with Chase Private Client get unlimited trades.
  • CEO Jamie Dimon hinted at this move in 2016, citing Amazon Prime as his inspiration.

J.P. Morgan Chase is about to lob a grenade into the increasingly competitive world of retail investing.

The bank is rolling out a digital investing service next week that comes bundled with free or discounted trades, a sophisticated portfolio-building tool and no-fee access to the bank's stock research. Anyone who downloads J.P. Morgan's mobile banking app or uses its website can get at least 100 free trades in the first year.

The move, more than two years in the making, instantly intensifies the price war that is occurring throughout the investing landscape. Whether it's executing trades, managing portfolios or simply owning mutual funds and ETFs, costs have been collapsing on Wall Street. Among brokerages, the free trading app provided by Robinhood Markets has gained attention recently for attracting more than 5 million users, and a $5.6 billion valuation, in just a few years.

But J.P. Morgan, the biggest U.S. bank, has a distinct advantage over many competitors: It already has financial ties with half of American households. When its engineers flip a switch in coming days, more than 47 million people who already use the company's banking app or website will gain access to the new service, called You Invest.

"There are customers out there who may not want to trust their credentials or their money to an app of the month," said Jed Laskowitz, a J.P Morgan veteran who runs You Invest. "We're thinking about what's right for our customers, helping them get invested, and stay invested and diversified."

JP Morgan's You Invest app 


The move is a remarkable turnaround for a bank that charged $24.95 for online trades as recently as last year. Still, the industry has been expecting something disruptive from the New York-based company for some time. In June 2016, Chief Executive Officer Jamie Dimon hinted that he was considering no-cost brokerage trades or a free automated investing program. His inspiration: Amazon Prime and its hodgepodge of free services.

"If you're a good account, it's no different than Jeff Bezos doing the $99 Prime and adding services to it," Dimon said at the 2016 investor conference.