Retail investors using Motif Investing will now have exclusive access to initial public offerings led by J.P. Morgan, thanks to a new partnership the companies announced Wednesday.
Motif's platform will allow investors to see the IPOs, indicate an interest in the offering and place a conditional order. There will be a time frame (determined by level of demand for the stock) where any client who makes a request will be guaranteed at least some stock. Motif will manage the order process and direct the distribution of share allocations.
New and existing investors with a minimum of $250 in a Motif account can get involved, and the trades will all be commission-free.
Hardeep Walia, the CEO of Motif, said this effectively eliminates the traditional account size and length of relationship barriers that previously made it impossible for small, individual investors to participate in new stock offerings.
On J.P. Morgan’s side, the bank said it would educate companies preparing for an IPO on the benefits of using Motif to broaden their retail investor reach. For example, a platform like Motif can help companies get stock into the hands of brand loyalists rather than day traders.
According to the Wall Street Journal, the deal is the latest in a trend of banks and brokerages trying to make the IPO market more accessible to smaller investors to win over the hottest tech and consumer IPOs with a greater demand for the offering.
Motif is an online broker founded in 2010 and is geared towards younger investors looking to invest in themes or ideological causes. J.P. Morgan invested $35 million into Motif in May 2014.