Wealthsimple introduces fractional investing

Wealthsimple Inc. has become the first online investment management firm in Canada to introduce fractional investing in both Canadian and U.S. stocks, launching a new service that allows investors to buy and sell as little as one-dollar's worth of a subset of popular stocks.

After an early access phase that let some customers test it out, the company rolled out the “Fractional Buy” option on Wednesday, letting app users order the dollar value of their choosing of a set of applicable stocks. Customers can also choose a “Fractional Sell” option to unload a select value of shares they hold, paying and receiving the execution price at the time the order is sent to market.

The service currently only applies to a limited number of stocks, including Toronto Dominion Bank (TD), Royal Bank of Canada (RY), Canadian National Railway Co. (CNR) and high-flying Shopify (SHOP) in Canada and popular U.s.-listed stocks such as Amazon Inc. (AMZN), Apple Inc. (AAPL), Facebook (FB), Airbnb, Inc. (ABNB), and Google LLC (GOOGL).

With an increasing number of companies, especially popular tech names, shunning or delaying stock splits — Amazon, for example, is currently trading at more than US$3,600 per share — fractional ownership can be the only way some investors can get a foothold in the fast-growing companies.

“Fractional shares feed into our larger mission of making financial services accessible to everyone,” Robyn Ross, Wealthsimple's chief core operations officer and head of trade, told the Financial Post in an e-mail.

The fractional share gives the user ownership of that stock that they purchase, though they do not qualify for voting rights. During tax time, the partial stock is treated in the same way any normal full shares would be treated.