Fidelity Will Add 9,000 Staffers To Help With Retail Trading Boom, But Will It Last?
Fidelity recently announced plans to hire an additional 9,000 employees by year’s end to help its platform keep up with the surge in demand for stock-trading and personal investment services. The hiring spree is actually the company’s third in the past year, as millions of new investors rushed to trading platforms like Fidelity, Charles Schwab and Robinhood to get in on the meme trading craze. Highly popularized trading sprees for stocks like GameStop and AMC fueled by social media saw an influx of new investors. These new investors moved quickly and in large numbers based on the recommendations they were receiving from sites like Reddit.
In order to keep up with the new pace, Fidelity is expected to grow its total workforce by more than 22% this year to over 60,000 employees, reports the Wall Street Journal.
The cheap trading fees offered by platforms like Fidelity and Robinhood drew in many new — and inexperienced — investors that strained company call centers and platforms overall to respond to customers’ questions and process their transactions. Then, of course, when platforms like Robinhood were forced to shut down due to unprecedented trading volatility, the customer support systems were even more overwhelmed.
Adding more staff will ease some of the processing pressure Fidelity faced in 2021, but the overall bet is that these new, fickle investors will eventually transition to more expensive services like financial planning, adds WSJ. In addition, the firm added 1.7 million new retail accounts in the 12-month period ended June, in which 697,000 of those accounts were opened by clients 35 years old or younger.
While the influx of trading and new positions can help a struggling economic recovery, Bloomberg points out the important elephant in the room — is this a permanently high plateau of retail trading activity, or will a bear market cause all these new investors to become frustrated and give up trading stocks?
Retail trading surges stemming from social media-fueled recommendations were very of the moment in 2021, but companies will be taking a risk assuming fickle young investors will stay the course long enough to turn Reddit day trading into long-term clients.
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Last updated: September 1, 2021