Fidelity's brokerage arm reached a deal in which its clients will get access to new stock and bond offerings that are underwritten by
For J.P. Morgan, the deal is a way to access the same kind of retail investor base that
command through their in-house brokerages. Access to retail investors is useful when an investment bank markets new offerings, such as an IPO or follow-on offering.
A broader market can also help a company get a higher price when it sells a deal. Through the partnership, J.P. Morgan will be able to access both institutional and retail clients at Fidelity, or about 10.7 million accounts. J.P. Morgan previously sold its stock and bond products primarily to institutional clients, hedge funds and rich individuals through the J.P. Morgan Private Bank.
"This alliance gives J.P. Morgan and its clients access to Fidelity's extensive distribution network," said Steve Black, co-CEO of J.P. Morgan's Investment Bank. "We are now able to offer our clients the opportunity to reach a far broader set of investors. Becoming Fidelity's primary provider of new issue equity and debt products is a key competitive advantage for J.P. Morgan."
By partnering with J.P. Morgan, Fidelity retail clients will gain access to deals that are led managed by J.P. Morgan. Fidelity has a similar contract with
"We continue to make significant investments in our brokerage business to strengthen our overall offering and ensure Fidelity's retail and institutional brokerage customers have access to the technology, services and investment products they need to be successful," said Ellyn A. McColgan, president, Fidelity Brokerage Company. "We are pleased to establish an alliance with one of the top underwriters in the industry."