By Justin Baer and Peter Rudegeair

Stock trading volume has surged in the past week, and Wall Street's online brokers are struggling to keep up.

In recent days, clients of Fidelity Investments, E*Trade Financial Corp., Charles Schwab Corp. and Vanguard Group have encountered brief delays executing trades or temporarily lost access to vital account information. The service disruptions came during a period of frenetic trading, largely driven by individual investors.

"These outages generate annoyance among investors in the short term," said William Trout, director of wealth management at Javelin Strategy & Research. "Longer-term, outages call into question the stability of these platforms, even if the need for greater capacity can be addressed."

The outages also can take their toll on the markets themselves, especially at a time when individual investors' interest in stocks has touched levels unseen in decades, he said. Robinhood Markets Inc. and other popular trading platforms experienced outages last spring, when concerns over the pandemic and its effect on the economy triggered the worst stock-market selloff since Black Monday.

The market snapped back almost as quickly, drawing in many first-time stock traders. And with many Americans transitioning to remote work, those investors had more time to pore over their brokerage accounts and place their bets. Their enthusiasm, along with efforts by brokers to beef up their platforms, so far has offset clients' frustration with temporary outages. But repeated problems will test their patience and draw regulators' attention, Mr. Trout said.

"The surge in self-directed investing amid Covid has made these online platforms a centerpiece of the investments landscape," he added. "As infrastructure becomes a core issue, the markets -- or the regulator -- will demand reform. Reliability of these platforms and investor confidence have become interlinked."

During the retail-trading boom of 2020, volume at many big brokerages shattered records. The average daily number of retail trades on E*Trade, which was acquired by Morgan Stanley last year, hit 952,000 in 2020, more than triple its previous annual high point. Schwab set, and broke, multiple single-day trading records in 2020, setting a new peak on Nov. 9 of 7.8 million trades.

The number of active retail-trading accounts also swelled. In the second half of 2020, E*Trade added about 900,000 net new accounts, bringing Morgan Stanley's total to 6.7 million. Following the close of its acquisition of TD Ameritrade Holding Corp. in the fourth quarter, Schwab counted nearly 30 million active brokerage accounts at the end of 2020.

A spokesman for Fidelity said its online platforms have had no issues on Tuesday. But "for a short period of time yesterday, some customers might have an experienced intermittent issue when attempting to view positions or slowness when attempting to place orders on Fidelity.com," the spokesman said. "We worked quickly to remediate the issue and our systems were functioning normally after that."

Fidelity, he said, monitors its online platforms to help ensure the firm adds sufficient capacity ahead of any expected surge in activity.

E*Trade hasn't suffered any outages in recent days, but some customers experienced delays in executing trades given higher volumes, a person familiar with the matter said.

A Schwab spokeswoman said "our clients experienced intermittent issues for a brief period at market open" on Monday.

"We worked to resolve the issue quickly and apologize for any inconvenience this caused our clients," she said. "Unrelated to yesterday, this morning we experienced an issue with bank balances not displaying accurately which has been resolved. Trading functionality was not impacted."

The firm monitors its platforms and seeks to get ahead of high-volume trading days. "Nonetheless," the spokeswoman said, "there remains a risk of technical difficulties, or congestion, or latency, for a variety of reasons." Schwab pledged to refund clients' fees or commissions if they aren't satisfied, she said.

Giant investment manager Vanguard Group suffered system issues on Monday morning. Some clients complained on social media that they couldn't access accounts online. The firm apologized Monday on social media for the inconvenience. "The issue was resolved quickly and we thank clients for their patience," a spokeswoman said.

Robinhood, whose easy-to-use app had helped draw many first-time investors to the market last year, said Tuesday its brokerage systems haven't had any issues this week.

--Dawn Lim contributed to this article.

(END) Dow Jones Newswires

01-26-21 1534ET