Charles Schwab is launching fractional stock-trading in June, making good on a promise that sent rivals Robinhood and Fidelity racing to offer slices of pricey shares (SCHW)

Charles Schwab is launching fractional stock-trading in early June, the firm plans to announce on Tuesday.
The offering, which founder Charles R. Schwab had first said the firm was working on last fall, excludes exchange-traded funds and is limited to S&P 500 components.
For Schwab, the product marks a push to attract new investors who don't have $2,300 to shell out for an Amazon share.
Robinhood and Fidelity have launched their own fractional-stock features in recent months.

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Charles Schwab is launching fractional stock-trading in early June, the firm plans to announce on Tuesday, marking an effort to attract newbie investors in what's become a fiercely competitive arena for both new and legacy brokerage players.
The offering, which the firm first said it was working on last fall, will exclude exchange-traded funds and is limited to S&P 500 components, Business Insider has learned.
The move will allow investors to buy slices of individual stocks with a minimum of $5. The service, named "Schwab Stock Slices," will launch on June 9 and allow users to purchase up to 10 different "slices" at once.
"We developed Schwab Stock Slices to meet two important needs we heard from clients — newer investors who want the ability to buy multiple stocks in small dollar amounts and older more affluent investors who want to more easily gift stock ownership to younger generations," Neesha Hathi, the firm's chief digital officer, said in a statement. 
For Schwab, the launch has been a long time coming. Founder and chairman Charles R. Schwab said in an interview with The Wall Street Journal last October that the company was planning to introduce the capability soon. At the time, a spokesperson declined to specify a timeline for the launch.
Competitors to the San Francisco-based wealth management and brokerage firm have launched their own fractional-share offerings in the meantime. Stock-trading startup Robinhood and Fidelity have gone live with their own fractional-stock features in recent months — Robinhood in December , and Fidelity a month later.
That's in addition to a slew of startups in the space that already had fractional trading in place, including Stash, M1 Finance, SoFi, and MoneyLion . 

For Schwab, a firm with $3.5 trillion in client assets, pushing to acquire customers who can't afford to buy a full share of Amazon or Google might seem out place. But it underlines a strategy shift among wealth managers and brokerages to pursue less affluent customers.
The competition for going after young investors, especially high earners who could one day turn into lucrative wealth management clients, reached a fever pitch late last year when a string of brokerages said they would eliminate commissions for trades.
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