Investing in fractional shares has become increasingly popular in the past few years, yet some of your clients may still be unfamiliar with this investment technology. Therefore, we thought this post might be helpful for you to introduce the fractional shares concept to clients in easy-to-understand language.
What is a Fractional Share?
A fractional share is less than a whole share of a security. Most investors are familiar with fractional shares through mutual funds, which are purchased in dollar amounts, rather than whole share units.
How They Work
Fractional shares are a particularly effective tool for creating highly diversified portfolios with a large number of security holdings, which can even be done with a relatively small investment amount. We can designate a specific dollar amount to invest in each company and create a diversified portfolio of stocks that otherwise would have been out of reach. Unlike the traditional manner of buying a stock at a given whole share price, fractional share ownership is a dollar-based investing model allowing your clients to designate a certain amount ($5, $50, $100, $500, etc.) to invest.
Access to Institutional Money Managers
Fortunately, your clients have another compelling option for fractional share ownership. Freedom Advisors offers the ability to own a professionally managed model portfolio that provides diversification across styles, asset classes, geographies, sizes, and investment philosophies, gaining access to many of the world's most renowned institutional money managers and hidden gem boutiques, all with a single investment.
For more information, please download Fractional Shares: Investment Technology that Removes Barriers.
Advisory services are offered through Freedom Investment Management, Inc. ("Freedom"), a registered investment adviser. Freedom does not provide tax or legal advice. The information contained herein is for informational purposes only. This is not an offer to sell securities or provide investment advice. Investment strategies carry varying degrees of risk to include total loss. The representations and opinions herein are the opinions and view of Freedom and are believed to be reliable but are not guaranteed by Freedom. When applicable, sources used in forming Freedom’s opinion are cited, however, other sources may be available which contradict Freedom’s opinion, process, and methodology. Potential investors are advised to consult with their financial, tax and/or legal advisors prior to investing.
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