E-Trade joins the party $0 commission

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genjix
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E-Trade joins the party $0 commission

Post by genjix » Wed Oct 02, 2019 3:48 pm

E-Trade (ETFC) announced Thursday that it will eliminate commissions for its clients. The changes take effect on October 7.
"With this new commission schedule we are further raising the bar, delivering an unrivaled experience at price points that cannot be beat—main street investors will now trade the stocks and ETFs of their choice for $0," said E-Trade CEO Mike Pizzi in a statement

https://www.cnn.com/2019/10/02/investin ... mmissions/

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indexfundfan
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Re: E-Trade joins the party $0 commission

Post by indexfundfan » Wed Oct 02, 2019 3:52 pm

genjix wrote:
Wed Oct 02, 2019 3:48 pm
E-Trade (ETFC) announced Thursday that it will eliminate commissions for its clients. The changes take effect on October 7.
"With this new commission schedule we are further raising the bar, delivering an unrivaled experience at price points that cannot be beat—main street investors will now trade the stocks and ETFs of their choice for $0," said E-Trade CEO Mike Pizzi in a statement

https://www.cnn.com/2019/10/02/investin ... mmissions/
The ball is in your court Fidelity.
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Fclevz
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Re: E-Trade joins the party $0 commission

Post by Fclevz » Wed Oct 02, 2019 4:06 pm

So, just to keep it straight, the list for zero commissions is now?

Interactive Brokers
Schwab
TD Ameritrade
E*Trade
Vanguard (ETF's only)

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indexfundfan
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Re: E-Trade joins the party $0 commission

Post by indexfundfan » Wed Oct 02, 2019 4:11 pm

Free trade for stocks and ETFs without asset qualifications

Firstrade
Interactive Brokers Lite
Schwab
TD Ameritrade
E*Trade

Does not include FinTech startups.
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Hector
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Re: E-Trade joins the party $0 commission

Post by Hector » Wed Oct 02, 2019 4:39 pm

We are going to see a lot more people going with ETFs over mutual funds.

oldlongbeard
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Re: E-Trade joins the party $0 commission

Post by oldlongbeard » Wed Oct 02, 2019 5:09 pm

".....Here, Fido...."

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Re: E-Trade joins the party $0 commission

Post by whodidntante » Wed Oct 02, 2019 5:13 pm

Hector wrote:
Wed Oct 02, 2019 4:39 pm
We are going to see a lot more people going with ETFs over mutual funds.
The horror!

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genjix
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Re: E-Trade joins the party $0 commission

Post by genjix » Wed Oct 02, 2019 5:15 pm

Hector wrote:
Wed Oct 02, 2019 4:39 pm
We are going to see a lot more people going with ETFs over mutual funds.
ETFs would still have ER fees though right?

yakk0
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Re: E-Trade joins the party $0 commission

Post by yakk0 » Wed Oct 02, 2019 5:52 pm

Does anyone know if this applies to ESPP plans managed by them too? I know I end up paying ridiculous commissions to sell ESPP and RSUs held at Etrade. And I don't even know how the commissions are calculated. They've been different every time but range between $29-86.

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Re: E-Trade joins the party $0 commission

Post by pward » Wed Oct 02, 2019 6:08 pm

yakk0 wrote:
Wed Oct 02, 2019 5:52 pm
Does anyone know if this applies to ESPP plans managed by them too? I know I end up paying ridiculous commissions to sell ESPP and RSUs held at Etrade. And I don't even know how the commissions are calculated. They've been different every time but range between $29-86.
I'm in the same boat, though ours is a $30 flat fee per transaction. But 4x a year for RSU's and 2x per year on ESPP that adds up. My guess is that RSU's and ESPP will likely not be included unfortunately.

rascott
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Re: E-Trade joins the party $0 commission

Post by rascott » Wed Oct 02, 2019 8:12 pm

I fully expect TDA to buy/ merge with E Trade.

columbia
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Re: E-Trade joins the party $0 commission

Post by columbia » Wed Oct 02, 2019 8:28 pm

How easy will it be to move your holdings from these various fintechs if/when they go belly up?

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Re: E-Trade joins the party $0 commission

Post by CurlyDave » Wed Oct 02, 2019 8:30 pm

rascott wrote:
Wed Oct 02, 2019 8:12 pm
I fully expect TDA to buy/ merge with E Trade.
Have they fully digested Scottrade?

That was sure a negative for me. I started out with Datek because I really liked their streaming quotes and little graphs for each position I held. TDA bought Datek (and me as a customer as well) and immediately degraded the streaming. Then they bought Scottrade and the streaming got even worse. Now it is almost completely gone, but I have decades of history with them.

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Re: E-Trade joins the party $0 commission

Post by rascott » Wed Oct 02, 2019 8:52 pm

CurlyDave wrote:
Wed Oct 02, 2019 8:30 pm
rascott wrote:
Wed Oct 02, 2019 8:12 pm
I fully expect TDA to buy/ merge with E Trade.
Have they fully digested Scottrade?

That was sure a negative for me. I started out with Datek because I really liked their streaming quotes and little graphs for each position I held. TDA bought Datek (and me as a customer as well) and immediately degraded the streaming. Then they bought Scottrade and the streaming got even worse. Now it is almost completely gone, but I have decades of history with them.

I generally find TDA the best online broker I've used.... but started gravitating away due to having free trades elsewhere. This new news might entice me to move everything to them.

Wonder when Ally will drop to $0.

effigy98
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Re: E-Trade joins the party $0 commission

Post by effigy98 » Wed Oct 02, 2019 8:57 pm

M1 finance plus you can buy partial shares for us poor folk.

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Re: E-Trade joins the party $0 commission

Post by tesuzuki2002 » Thu Oct 03, 2019 12:56 am

genjix wrote:
Wed Oct 02, 2019 3:48 pm
E-Trade (ETFC) announced Thursday that it will eliminate commissions for its clients. The changes take effect on October 7.
"With this new commission schedule we are further raising the bar, delivering an unrivaled experience at price points that cannot be beat—main street investors will now trade the stocks and ETFs of their choice for $0," said E-Trade CEO Mike Pizzi in a statement

https://www.cnn.com/2019/10/02/investin ... mmissions/
A little late to the party.... but atleast they showed up!!

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Re: E-Trade joins the party $0 commission

Post by galawdawg » Thu Oct 03, 2019 7:39 am

I discovered when looking to move from Vanguard Brokerage to another firm that E*Trade offers 110 Vanguard mutual funds with no transaction fee. I believe they may be the only brokerage outside of Vanguard itself where you can buy and sell Vanguard mutual funds without transaction fees or commissions.

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Re: E-Trade joins the party $0 commission

Post by whodidntante » Thu Oct 03, 2019 7:41 am

oldlongbeard wrote:
Wed Oct 02, 2019 5:09 pm
".....Here, Fido...."
I bet there have been some contentious marketing meetings at Fido.

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indexfundfan
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Re: E-Trade joins the party $0 commission

Post by indexfundfan » Thu Oct 03, 2019 7:48 am

whodidntante wrote:
Thu Oct 03, 2019 7:41 am
oldlongbeard wrote:
Wed Oct 02, 2019 5:09 pm
".....Here, Fido...."
I bet there have been some contentious marketing meetings at Fido.
Here is Fidelity's canned reply on Twitter
We are committed to providing an exceptional experience and price is one component. With Fidelity, you receive industry-best order execution & price improvement, no investment mins. and zero expense ratio index funds. We’ll continue to enhance our offerings and keep you informed!
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David Althaus
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Re: E-Trade joins the party $0 commission

Post by David Althaus » Thu Oct 03, 2019 8:37 am

My guess is these companies have had this gamed out for a long time. Witness TDA dropping commissions within hours of Schwab. Companies don't just blithely agree to take a $200 to $400 million quarterly hit to revenue within eight hours. So, the longer Fidelity goes without a move the more you can read into it. Now we all need pay more attention to spreads--about as important as were commissions a few days back.

All the best

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Harry Livermore
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Re: E-Trade joins the party $0 commission

Post by Harry Livermore » Thu Oct 03, 2019 9:30 am

So, where do we think they will make up the revenue shortfall? Payment for order flow? Bigger spreads? Lower interest rates on sweep accounts? Annual maintenance fees for accounts below $1M? Generally, financial firms have this stuff all figured out. And they try REALLY hard to not make less money. Or is it all about gaining market share? Very interesting...
For the infrequent trader, a $4.95 commission might be less expensive in the long run than whatever they may have cooked up. I assume the big brains here on Bogleheads have already parsed out all of this...
But if it's no strings attached, I'm always happy to pay less! ;)
Cheers
Last edited by Harry Livermore on Tue Oct 08, 2019 5:08 am, edited 1 time in total.

hicabob
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Re: E-Trade joins the party $0 commission

Post by hicabob » Thu Oct 03, 2019 9:37 am

Everyone can roll their own index funds now at a competitive price. :twisted:

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SlowMovingInvestor
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Re: E-Trade joins the party $0 commission

Post by SlowMovingInvestor » Thu Oct 03, 2019 10:34 am

David Althaus wrote:
Thu Oct 03, 2019 8:37 am
My guess is these companies have had this gamed out for a long time. Witness TDA dropping commissions within hours of Schwab. Companies don't just blithely agree to take a $200 to $400 million quarterly hit to revenue within eight hours. So, the longer Fidelity goes without a move the more you can read into it. Now we all need pay more attention to spreads--about as important as were commissions a few days back.

All the best
Spreads aren't decided by these brokers, right ? And they are still required to trade at the NBBO. Put it another way, I don't think they can get more money than they already were out of spreads, order flow etc.

They might push robo-advisors, paid advisory services. etc.

Alaric
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Re: E-Trade joins the party $0 commission

Post by Alaric » Thu Oct 03, 2019 12:45 pm

I just received an email from E*Trade. Special offer: Get 90 days managed free.

The email says after that the annual advisory fee is $1.50 per $500 invested, so 0.30% ER.

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genjix
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Re: E-Trade joins the party $0 commission

Post by genjix » Thu Oct 03, 2019 1:13 pm

I got a promo email as well

Through October 31, get up to $3,000 when you simplify your investing with an E*TRADE managed portfolio.

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Re: E-Trade joins the party $0 commission

Post by Hector » Thu Oct 03, 2019 3:14 pm

genjix wrote:
Wed Oct 02, 2019 5:15 pm
Hector wrote:
Wed Oct 02, 2019 4:39 pm
We are going to see a lot more people going with ETFs over mutual funds.
ETFs would still have ER fees though right?
Right.
Fidelity has their own indexes and funds that track those indexes; they have zero ER. We might see more firms do that going forward.

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Hector
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Re: E-Trade joins the party $0 commission

Post by Hector » Thu Oct 03, 2019 3:23 pm

David Althaus wrote:
Thu Oct 03, 2019 8:37 am
My guess is these companies have had this gamed out for a long time. Witness TDA dropping commissions within hours of Schwab. Companies don't just blithely agree to take a $200 to $400 million quarterly hit to revenue within eight hours. So, the longer Fidelity goes without a move the more you can read into it. Now we all need pay more attention to spreads--about as important as were commissions a few days back.

All the best
When choosing between ETF and MF, I used to prefer ETFs. I am preferring mutual funds now. I don't need to worry about putting correct limit order. I also like trading using $ amount over # of units. I would do dividend and gain auto re-investment only with mutual funds and not ETFs.

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Re: E-Trade joins the party $0 commission

Post by whodidntante » Thu Oct 03, 2019 5:15 pm

indexfundfan wrote:
Thu Oct 03, 2019 7:48 am
whodidntante wrote:
Thu Oct 03, 2019 7:41 am
oldlongbeard wrote:
Wed Oct 02, 2019 5:09 pm
".....Here, Fido...."
I bet there have been some contentious marketing meetings at Fido.
Here is Fidelity's canned reply on Twitter
We are committed to providing an exceptional experience and price is one component. With Fidelity, you receive industry-best order execution & price improvement, no investment mins. and zero expense ratio index funds. We’ll continue to enhance our offerings and keep you informed!
So they are going to differentiate by charging commissions? That's adorable!

arf30
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Re: E-Trade joins the party $0 commission

Post by arf30 » Thu Oct 03, 2019 6:07 pm

I wonder if part of Fidelity's agreement with Blackrock is they can't offer other fund companies at zero commission.

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Re: E-Trade joins the party $0 commission

Post by whodidntante » Thu Oct 03, 2019 6:44 pm

arf30 wrote:
Thu Oct 03, 2019 6:07 pm
I wonder if part of Fidelity's agreement with Blackrock is they can't offer other fund companies at zero commission.
They already do.

stlutz
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Re: E-Trade joins the party $0 commission

Post by stlutz » Thu Oct 03, 2019 6:53 pm

I think Fidelity's bigger issue is that they are the only one of the bunch (Schwab, E*Trade, TD Ameritrade) who pays a decent rate on uninvested cash.

They still generate good amount of revenue from their sweep money market funds (ER = .42%), but they would get a lot more if they essentially paid 0 like everyone else. They also don't have any other fees.

So, I'm sure they will go to 0 on commissions. I think they are just figuring out how they are going to claw at least some of that revenue loss back.

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AerialWombat
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Re: E-Trade joins the party $0 commission

Post by AerialWombat » Thu Oct 03, 2019 6:55 pm

So I’ll save $4.95 a month when I make my monthly buy in my solo 401k at E-Trade.

Yee. Haw.
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SlowMovingInvestor
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Re: E-Trade joins the party $0 commission

Post by SlowMovingInvestor » Thu Oct 03, 2019 7:01 pm

Since Fidelity is a private company, they may feel less pressure to respond immediately, and can take their time to work out a response.

They may go for another class of account like iBroker did (which will likely require back end IT work to setup) rather than just drop rates to zerof ro everyone.

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Re: E-Trade joins the party $0 commission

Post by abuss368 » Thu Oct 03, 2019 7:58 pm

Many years ago when we traded individual stocks, we were with eTrade. When I think back to the amount of fees and commissions we paid, it is unfortunate.
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Re: E-Trade joins the party $0 commission

Post by GuyInFL » Thu Oct 03, 2019 8:14 pm

genjix wrote:
Wed Oct 02, 2019 5:15 pm
Hector wrote:
Wed Oct 02, 2019 4:39 pm
We are going to see a lot more people going with ETFs over mutual funds.
ETFs would still have ER fees though right?
My vanguard ETFs have very low fees.

shess
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Re: E-Trade joins the party $0 commission

Post by shess » Thu Oct 03, 2019 8:56 pm

CurlyDave wrote:
Wed Oct 02, 2019 8:30 pm
rascott wrote:
Wed Oct 02, 2019 8:12 pm
I fully expect TDA to buy/ merge with E Trade.
Have they fully digested Scottrade?

That was sure a negative for me. I started out with Datek because I really liked their streaming quotes and little graphs for each position I held. TDA bought Datek (and me as a customer as well) and immediately degraded the streaming. Then they bought Scottrade and the streaming got even worse. Now it is almost completely gone, but I have decades of history with them.
Eh, decades of history isn't worth all that much. I started with TD Waterhouse around 2000, and have been thinking of moving my last account away because the local office keeps bugging us with offers to get in on special management opportunities. If I make one trade a year on that account, I'd be surprised, but it's marginable and has ACH setup and I'm lazy, so ... but if they start calling telling me how their special management opportunities are even cheaper with the free trades, I might finally move on...

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Re: E-Trade joins the party $0 commission

Post by indexfundfan » Fri Oct 04, 2019 6:38 am

stlutz wrote:
Thu Oct 03, 2019 6:53 pm
I think Fidelity's bigger issue is that they are the only one of the bunch (Schwab, E*Trade, TD Ameritrade) who pays a decent rate on uninvested cash.

They still generate good amount of revenue from their sweep money market funds (ER = .42%), but they would get a lot more if they essentially paid 0 like everyone else. They also don't have any other fees.

So, I'm sure they will go to 0 on commissions. I think they are just figuring out how they are going to claw at least some of that revenue loss back.
Fidelity could be considering to follow the competition by forcing investors into low yielding FDIC sweeps. The only problem is that they have recently been advertising heavily that they offer sweep money market funds.
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indexfundfan
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Re: E-Trade joins the party $0 commission

Post by indexfundfan » Mon Oct 07, 2019 7:59 am

It looks like Etrade has followed TDA and eliminated the $19.99 short term trading fee.
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