This story was delivered to Business Insider Intelligence Fintech Pro subscribers earlier this morning.To get this story plus others to your inbox each day, hours before they’re published on Business Insider, click here.The US-based brokerage firm is planning to hire more financial consultants; it currently employs 410 but wants to hit 450 by year-end and 500 by the end of 2021, according to Business Insider.
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Additionally, while E-Trade was initially planning to cut its advertising and marketing spend this year, it’s now expecting to spend the same amount as last year.These decisions come at a time when the broader trading industry is looking to cut costs and fees and focus on digital.Cutting costs and fees: Last year, a wave of incumbent brokerages slashed fees for their services to better compete with startups in the space, like commission-free trading platform Robinhood. Charles Schwab, Fidelity, E-Trade, and TD Ameritrade all dropped commission fees for the online purchasing and selling of US stocks, exchange-traded funds, and options, for example. Additionally, Charles Schwab announced that it would acquire TD Ameritrade for $26 billion last year, and it’s planning job cuts and branch closures as part of the merger, likely in an effort to save on costs.Going digital: Charles Schwab’s decision to cut jobs and close branches also indicates that it’s focusing more on digitally enabled products. Since players like Robinhood are known for their digital-first platforms — which are easy to navigate, allow consumers to execute their trades, and provide them with educational features — legacy players have to keep up and enhance their digital offerings to remain competitive. So, while hiring more financial consultants may help E-Trade further build out its human advice offering, it shouldn’t underestimate digital in its long-term strategy and should ensure that it allocates enough resources toward its digital transformation.That said, by betting on human consultants, E-Trade may carve itself a lucrative niche for its services as the industry transforms. Fee-free trading services and digital-first platforms are especially attractive to younger demographics that are investing for the first time or looking to build their wealth.However, higher net worth consumers have more money available for expensive services, such as human trading advice — and wealth management clients are becoming more willing to pay for financial advice. With the industry moving toward digital-first offerings, E-Trade putting its effort into financial consultants may make it a particularly attractive brokerage platform for higher net worth individuals and paying customers, who are more lucrative users than those using predominantly free services.Want to read more stories like this one? Here’s how to get access: Sign up for Fintech Pro, Business Insider Intelligence’s expert product suite tailored for today’s (and tomorrow’s) decision-makers in the financial services industry, delivered to your inbox 6x a week.>>Get StartedCheck to see if you already have access to Business Insider Intelligence through your company, or inquire about access if you don’t.>>Check If You Have Enterprise AccessExplore related topics in more depth.>>Visit Our Report StoreCurrent subscribers can log in to read the briefing here.
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