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>>> Fidelity Is Latest to Cut Online Trading Commissions to Zero


Wall Street’s digitization has reset many of the fundamental costs of investing

Beginning early Thursday, Fidelity stopped charging individual investors commissions on online trades of U.S. stocks, exchange-traded funds and options trades


Wall Street Journal

By Justin Baer

Oct. 10, 2019


https://www.wsj.com/articles/fidelity-is-latest-to-cut-online-trading-commissions-to-zero-11570680060


Fidelity Investments eliminated trading commissions on its online brokerage, matching a step some of its biggest rivals unveiled last week.

Beginning early Thursday, Fidelity stopped charging individual investors commissions on online trades of U.S. stocks, exchange-traded funds and options trades. For investment advisers, commissions will be cut to zero on Nov. 4. Fidelity’s online brokerage has 21.8 million accounts.

Before Thursday’s move, Fidelity charged $4.95 for online stock trades.

Wall Street’s digitization has reset many of the fundamental costs of investing, from commissions to the fees paid on mutual funds, and lifted investors’ expectations for their brokers, advisers and money managers. Firms like Fidelity and Charles Schwab Corp., which earlier eliminated trading commissions, have been racing to lure more customers with lower-cost products and services. Some of those price wars have ended with fees at or close to zero.

Schwab said last week it would scrap commissions to trade stocks, ETFs and options online. While TD Ameritrade Holding Corp. and E*Trade Financial Corp. quickly followed suit, Fidelity didn’t. And even after the firm matched that offering, Fidelity executives have sought to play down its significance.

“We prioritized where we could provide the most value to investors,” Kathleen Murphy, president of Fidelity’s personal-investing business, said in an interview. “It’s much more important to have industry-leading practices on cash and trade execution.”

Fidelity has long argued that the firm trades stocks more efficiently than many of its peers, saving money for clients.

Two months ago, Fidelity unveiled plans to divert clients’ cash into higher-yielding money-market funds, arguing the step provided a sharp contrast to their competitors’ practice of paying out ultralow rates on cash.

More than 500 ETFs already have traded commission-free on Fidelity’s platform, including several hundred managed by BlackRock Inc. “We continue to have a great relationship with BlackRock as well as the other ETF sponsors currently participating in our commission-free ETF platform,” a Fidelity spokeswoman said.

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