E-Trade seeks to hire more financial consultants

The US-based brokerage firm plans to hire more financial consultants; it currently employs 410 people but aims to reach 450 by the end of the year and 500 by the end of 2021, according to Business Insider.

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Additionally, while E-Trade initially planned to cut advertising and marketing spending this year, it now expects to spend the same amount as last year.

These decisions come at a time when the wider commercial industry is looking to cut costs and fees and focus on digital.

  • Cutting costs and fees: Last year, a wave of incumbent brokerages reduced fees for their services to better compete with startups in the industry, such as commission-free trading platform Robinhood. Charles Schwab, Fidelity, E-Trade and TD Ameritrade have all lowered commission fees for buying and selling US stocks, exchange-traded funds and options online, for example. Additionally, Charles Schwab announced he would acquire TD Ameritrade for $26 billion last year, and he plans job cuts and branch closures as part of the merger, likely to reduce costs.
  • Go digital: Charles Schwab’s decision to cut jobs and close branches also signals that he is focusing more on digital-enabled products. Given that players like Robinhood are known for their first digital platforms – which are easy to navigate, allow consumers to execute their transactions and provide them with educational features – traditional players must maintain and improve their digital offerings to stay. competitive. So while hiring more financial consultants can help E-Trade further develop its human advisory offering, it should not underestimate digital in its long-term strategy and should ensure that it allocates enough resources for its digital transformation.

That said, by betting on human consultants, E-Trade could carve out a lucrative niche for its services as the industry transforms. Free trading services and digital platforms are particularly appealing to young people investing for the first time or looking to build wealth.

However, higher net worth consumers have more money available for expensive services, such as human business advice – and wealth management clients are increasingly willing to pay for financial advice. As the industry moves towards digital-first offerings, E-Trade, which focuses its efforts on financial consultants, could make it a particularly attractive brokerage platform for high-net-worth individuals and paying clients, who are more lucrative users than those who mainly use free services.

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