A couple of days ago my California son sent me a picture of a Stockpile kiosk in an office supply store.  I’d known about the company, a subsidiary of stock market clearing house Apex, for a while but hadn’t looked into it before this.

The idea is that you can buy or gift small fixed dollar amounts of high profile stocks, like Amazon, Nexflix or Tesla, or index ETFs for that matter, either using a gift card you buy in office supply stores, supermarkets etc. or find online (gift card or e-card) at stockpile.com.  The recipient can either redeem the card for cash or use it to purchase fractional shares of the stock whose name is on the card.

My son’s first reaction is that this is a symptom of the kind of craziness that marks the top of a stock market cycle, like when strangers on the subway start to trade stock tips or when a cab driver does the same thing, explaining he’s a day trader who now drives as a hobby.  (I was a cab driver in Manhattan once and I can’t imagine anyone doing this who doesn’t have to.)

My hunch is that this isn’t a sign of the market topping, however (I’d be more worried if the kiosk offered bonds).  Of course, I think I’m pretty good at recognizing bottoms, but I know I’m bad at seeing tops.

Rather, I think this is another step in the evolution of stock investing away from the traditional brokerage model.  That model has three main defects:  the prices are outrageously high; the brokerage salesperson (around 90% are men) has no legal responsibility to do what’s best for the client; and in my experience the service and advice are poor.

Stockpile.com, in contrast, is bare bones.  No advice.  All trades are done at the day’s closing price.  Commissions are $.99 a trade.  And, of course, you can buy and sell fractional shares.

Target customers appear to be either impulse buyers, desperate gift givers or younger investors without much money to spare.  It’s hard to know how long the service will stay this way or how it will evolve.

I remember speaking with traditional brokers when marketing my mutual funds who believed (correctly, I think) that many clients kept most of their investment assets with Fidelity or Charles Schwab.  That way they would get advice from their brokers but only do, say a third of their trading at several hundred dollars  pop and the rest for $7 or $8 with a discount broker.

Maybe Millennials will end up keeping a third of their money with Fidelity or Schwab to get access to the statistical information they have available but do most of their trading for $.99 with Stockpile.  Maybe retiring Boomers, now more money-conscious, will do the same thing.

My overall reaction:  another evolutionary step, another nail in the coffin of traditional brokers.