Fidelity to $0 Commissions

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Cash
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Fidelity to $0 Commissions

Post by Cash » Thu Oct 10, 2019 5:16 am

I thought this deserved its own thread like the others:
jpsfranks wrote:
Wed Oct 09, 2019 11:16 pm
Fidelity follows suit and eliminates trading commissions.

https://www.wsj.com/articles/fidelity-i ... 1570680060

I don't really see any announcement on Fidelity's site about it but if I queue up a market order for tomorrow I see a $0 estimated commission.
Confirmed by Fidelity’s hometown paper:

https://www.bostonglobe.com/business/20 ... story.html

EDIT: The press release: https://www.fidelity.com/bin-public/060 ... 101019.pdf
Last edited by Cash on Thu Oct 10, 2019 10:34 am, edited 1 time in total.

UpperNwGuy
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Re: Fidelity to $0 Commissions

Post by UpperNwGuy » Thu Oct 10, 2019 5:32 am

I guess this means we can quit posting in that other thread that asks when we will be moving our accounts out of Fidelity because of the commissions.

MFInvestor
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November 10--Fidelity cuts fees to $0 as it jumps on zero-commission bandwagon

Post by MFInvestor » Thu Oct 10, 2019 5:43 am

[merged into existing topic - moderator prudent]
Fidelity cuts fees to $0 as it jumps on zero-commission bandwagon
Fidelity Investments said that it is eliminating trading commissions, becoming the latest company to reduce brokerage fees as rival investing platforms chase greater market share.

Read now: StockTwits to launch commission-free stock trading platform to rival Robinhood, others

Fidelity said it would cut fees to $0 on online trades of U.S. stocks, eliminating a $4.95 charge for such trades. The Boston-based company’s fee changes also include exchange-traded funds and options transactions. For investment advisers, commissions will be cut to zero on Nov. 4. Fidelity’s online brokerage has 21.8 million accounts, the Wall Street Journal reported.

https://www.marketwatch.com/story/fidel ... latestnews

808
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Re: Fidelity to $0 Commissions

Post by 808 » Thu Oct 10, 2019 5:45 am

jpsfranks wrote:
Wed Oct 09, 2019 11:16 pm
I don't really see any announcement on Fidelity's site about it but if I queue up a market order for tomorrow I see a $0 estimated commission.
https://www.fidelity.com/trading/commis ... rgin-rates

ARoseByAnyOtherName
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Re: Fidelity to $0 Commissions

Post by ARoseByAnyOtherName » Thu Oct 10, 2019 5:48 am

This bit from the Boston Globe article was interesting:

“The Boston-based firm, the largest online brokerage with almost 22 million accounts”

I didn’t realize they were the largest online brokerage. That’s interesting - though also a little vague. What’s counted in “online@ and I wonder who the largest overall brokerage is?

cheesepep
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Re: Fidelity to $0 Commissions

Post by cheesepep » Thu Oct 10, 2019 5:59 am

Kind of also important is who has the most assets. They can use these assets to get more margin interests to their advantage. Good for competition.

ARoseByAnyOtherName
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Re: Fidelity to $0 Commissions

Post by ARoseByAnyOtherName » Thu Oct 10, 2019 6:00 am

UpperNwGuy wrote:
Thu Oct 10, 2019 5:32 am
I guess this means we can quit posting in that other thread that asks when we will be moving our accounts out of Fidelity because of the commissions.
We’ll just have to start a new thread where people who had free trades at Fidelity complain about how they aren’t special anymore now that everyone has them. ;-)

lazyday
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Re: Fidelity to $0 Commissions

Post by lazyday » Thu Oct 10, 2019 6:10 am

If Fidelity continues to offer good price improvement, they will become my default brokerage choice.

Vanguard has the best money market sweep rates, but Fidelity’s are close, and they have better customer service and maybe better trade execution.

Of course Vanguard would be better if I suffer cognitive decline or die. They are less likely to push expensive products.

https://www.fidelity.com/trading/execut ... y/overview
Our price improvement can save investors $17.20 on average for a 1,000-share equity order, compared to the industry average of $2.89.
We are the only firm to voluntarily report full price improvement savings using the Financial Information Forum (FIF) standards.

Jack FFR1846
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Re: Fidelity to $0 Commissions

Post by Jack FFR1846 » Thu Oct 10, 2019 6:15 am

Choices, choices. Just within Fidelity, zero fee trades......or zero ER mutual funds? Tastes great.....or less filling?
Bogle: Smart Beta is stupid

student
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Re: Fidelity to $0 Commissions

Post by student » Thu Oct 10, 2019 6:39 am

The interesting part is

"The Boston-based firm, the largest online brokerage with almost 22 million accounts, boasts in a new ad that retail customers will earn 1.58 percent on their cash balances automatically swept into a money-market fund, based on yields as of Oct. 8. That tops rates at rivals, the firm said, asserting that customers also save by using Fidelity’s trade execution."

Topic Author
Cash
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Re: Fidelity to $0 Commissions

Post by Cash » Thu Oct 10, 2019 7:04 am

ARoseByAnyOtherName wrote:
Thu Oct 10, 2019 6:00 am
UpperNwGuy wrote:
Thu Oct 10, 2019 5:32 am
I guess this means we can quit posting in that other thread that asks when we will be moving our accounts out of Fidelity because of the commissions.
We’ll just have to start a new thread where people who had free trades at Fidelity complain about how they aren’t special anymore now that everyone has them. ;-)
Haha I just got some free trades last night. The rep could have just said, “How about unlimited free trades??” But she probably didn’t know.

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Cash
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Re: Fidelity to $0 Commissions

Post by Cash » Thu Oct 10, 2019 7:05 am

student wrote:
Thu Oct 10, 2019 6:39 am
The interesting part is

"The Boston-based firm, the largest online brokerage with almost 22 million accounts, boasts in a new ad that retail customers will earn 1.58 percent on their cash balances automatically swept into a money-market fund, based on yields as of Oct. 8. That tops rates at rivals, the firm said, asserting that customers also save by using Fidelity’s trade execution."
Yep it looks like that is how they are going to try to differentiate themselves. Plus no random fees on wire transfers and such.

diy60
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Re: Fidelity to $0 Commissions

Post by diy60 » Thu Oct 10, 2019 7:17 am

UpperNwGuy wrote:
Thu Oct 10, 2019 5:32 am
I guess this means we can quit posting in that other thread that asks when we will be moving our accounts out of Fidelity because of the commissions.
+1, you just made my day.

But now we'll probably see a brand new thread "When $0 Commission doesn't mean free" speculating to all kinds of backroom shenanigans and evils.

cheesepep
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Re: Fidelity to $0 Commissions

Post by cheesepep » Thu Oct 10, 2019 7:30 am

cheesepep wrote:
Thu Oct 10, 2019 5:59 am
Kind of also important is who has the most assets. They can use these assets to get more margin interests to their advantage. Good for competition.
I found out that Fidelity has 2.46 trillion in assets and Schwab has 3.72 trillion in assets. Fidelity is better in that everyone gets 1.58% automatically, whereas Schwab and others just gets 0.24% (or around that amount), unless you change to their MMA account (free) which is 1.80%, but not as flexible (requires 1 day to get cash). I'll stick with Schwab. Fidelity is going to hurt doing it this way, but maybe better in the end. I have no idea.

student
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Re: Fidelity to $0 Commissions

Post by student » Thu Oct 10, 2019 7:34 am

cheesepep wrote:
Thu Oct 10, 2019 7:30 am
cheesepep wrote:
Thu Oct 10, 2019 5:59 am
Kind of also important is who has the most assets. They can use these assets to get more margin interests to their advantage. Good for competition.
I found out that Fidelity has 2.46 trillion in assets and Schwab has 3.72 trillion in assets. Fidelity is better in that everyone gets 1.58% automatically, whereas Schwab and others just gets 0.24% (or around that amount), unless you change to their MMA account (free) which is 1.80%, but not as flexible (requires 1 day to get cash). I'll stick with Schwab. Fidelity is going to hurt doing it this way, but maybe better in the end. I have no idea.
And Robinhood thought they have found a way to distinguish themselves by announcing this yesterday https://techcrunch.com/2019/10/08/robin ... anagement/ The big boys are not going to be sitting ducks.

bondsr4me
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Re: Fidelity to $0 Commissions

Post by bondsr4me » Thu Oct 10, 2019 7:34 am

ARoseByAnyOtherName wrote:
Thu Oct 10, 2019 6:00 am
UpperNwGuy wrote:
Thu Oct 10, 2019 5:32 am
I guess this means we can quit posting in that other thread that asks when we will be moving our accounts out of Fidelity because of the commissions.
We’ll just have to start a new thread where people who had free trades at Fidelity complain about how they aren’t special anymore now that everyone has them. ;-)
not true...still special...for now....with my Free Trades from Fidelity, I don't even have to pay the .65/option contract fee.
Not sure what I will do when these free trades run out.

ScaledWheel
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Re: Fidelity to $0 Commissions

Post by ScaledWheel » Thu Oct 10, 2019 7:55 am

Good news, and thank you I guess to the people that were leaving Fidelity so that I didn't have to do anything besides wait a week for free trades...and I guess wait much longer until I'm in a financial position to take good advantage of the free trades.

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indexfundfan
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Re: Fidelity to $0 Commissions

Post by indexfundfan » Thu Oct 10, 2019 7:58 am

student wrote:
Thu Oct 10, 2019 7:34 am
And Robinhood thought they have found a way to distinguish themselves by announcing this yesterday https://techcrunch.com/2019/10/08/robin ... anagement/ The big boys are not going to be sitting ducks.
In effect RH is saying they have the best sweep for un-invested cash (at 2%).

Would that be the next shoe to fall in the race to zero (profits)?

Fidelity has been emphasizing that they have a better cash sweep compared to the competition for months now. Would one of Fidelity's competitor respond by allowing MMF sweeps for the general investor account?
My signature has been deleted.

scottieCosmic
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Re: Fidelity to $0 Commissions

Post by scottieCosmic » Thu Oct 10, 2019 8:06 am

All of the VTI & MSFT...for free! :sharebeer
Last edited by scottieCosmic on Thu Oct 10, 2019 8:26 am, edited 1 time in total.

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CardinalRule
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Re: Fidelity to $0 Commissions

Post by CardinalRule » Thu Oct 10, 2019 8:07 am

Will I no longer get my free TurboTax Premier? :confused :)

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HueyLD
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Re: Fidelity to $0 Commissions

Post by HueyLD » Thu Oct 10, 2019 8:10 am

CardinalRule wrote:
Thu Oct 10, 2019 8:07 am
Will I no longer get my free TurboTax Premier? :confused :)
You can afford to buy it yourself, right? :)

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JoMoney
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Re: Fidelity to $0 Commissions

Post by JoMoney » Thu Oct 10, 2019 8:24 am

It's a strange world where brokerages don't charge for brokerage services. I wonder what the business model looks like. For the publicly traded brokerages, this recent news hasn't been good for their companies valuation.
FOREX brokers have long offered zero commissions, but they're allowed to play middle-man and add a spread in a transaction, and can be the counter-party in transactions.
Last edited by JoMoney on Thu Oct 10, 2019 8:25 am, edited 1 time in total.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

ARoseByAnyOtherName
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Re: Fidelity to $0 Commissions

Post by ARoseByAnyOtherName » Thu Oct 10, 2019 8:25 am

bondsr4me wrote:
Thu Oct 10, 2019 7:34 am
ARoseByAnyOtherName wrote:
Thu Oct 10, 2019 6:00 am
UpperNwGuy wrote:
Thu Oct 10, 2019 5:32 am
I guess this means we can quit posting in that other thread that asks when we will be moving our accounts out of Fidelity because of the commissions.
We’ll just have to start a new thread where people who had free trades at Fidelity complain about how they aren’t special anymore now that everyone has them. ;-)
not true...still special...for now....with my Free Trades from Fidelity, I don't even have to pay the .65/option contract fee.
Not sure what I will do when these free trades run out.
Start a thread about how you’re leaving Fidelity over the $0.65 fee, obviously.

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SlowMovingInvestor
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Re: Fidelity to $0 Commissions

Post by SlowMovingInvestor » Thu Oct 10, 2019 8:44 am

JoMoney wrote:
Thu Oct 10, 2019 8:24 am
It's a strange world where brokerages don't charge for brokerage services. I wonder what the business model looks like. For the publicly traded brokerages, this recent news hasn't been good for their companies valuation.
FOREX brokers have long offered zero commissions, but they're allowed to play middle-man and add a spread in a transaction, and can be the counter-party in transactions.
Can a broker buy the shares for their own account (as long as they match the national best price) ? Fidelity's own Mutual Funds and ETFs must be doing a fair amount of trades for their own account, and they could provide counterparties. Although if a brokerage is being paid for order flow, I don't know if it would make sense to route it to an exchange anyway.

student
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Re: Fidelity to $0 Commissions

Post by student » Thu Oct 10, 2019 8:44 am

indexfundfan wrote:
Thu Oct 10, 2019 7:58 am
student wrote:
Thu Oct 10, 2019 7:34 am
And Robinhood thought they have found a way to distinguish themselves by announcing this yesterday https://techcrunch.com/2019/10/08/robin ... anagement/ The big boys are not going to be sitting ducks.
In effect RH is saying they have the best sweep for un-invested cash (at 2%).

Would that be the next shoe to fall in the race to zero (profits)?

Fidelity has been emphasizing that they have a better cash sweep compared to the competition for months now. Would one of Fidelity's competitor respond by allowing MMF sweeps for the general investor account?
Yes. RH is partnering with other banks to offer this. For example, Goldman Sachs is one of the partners, and Goldman Sachs' Marcus is offering 1.9%. I am wondering is RH eating the extra roughly 0.1% or do they have other deals from the banks.

lostdog
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Re: Fidelity to $0 Commissions

Post by lostdog » Thu Oct 10, 2019 8:55 am

The competition is awesome. This is great for all investors.
VTWAX and chill.

NicB
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Re: Fidelity to $0 Commissions

Post by NicB » Thu Oct 10, 2019 9:11 am

I'm curious -- how many Fidelity customers here are planning to switch from Fidelity TSM ETFs/MFs into VTI now?

I was one of those who traded all of my SPTM in my TDA HSA for VTI :D but don't know if I'll do the same in Fidelity...

pyld76
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Re: Fidelity to $0 Commissions

Post by pyld76 » Thu Oct 10, 2019 9:32 am

Well, this will leave me with a money market fund at VG and nothing else.

VG now only has three real advantages:

1. Principle. If you believe strongly enough in Vanguard being the proximate cause of the cost of investing dropping enough to give them your business as a result, rather than take advantage of that effect elsewhere, then you'll probably stay at VG.

2. Money market fund. Fido is still at a 30 or so bps disadvantage, minimum, to VG.

3. You want to hold mutual funds in taxable rather than ETFs. You get a deal due to the heartbeat trades that VG's share-class structure enables in VG mutual funds in taxable which is basically unobtainable anywhere else.

I've moved everything but my taxable stuffs to Fido, due to the superior customer service, a website that works, better EFT timings, free wires, etc (and a policy disagreement with VG on shareholder stewardship). I left the taxable stuff at VG only due to #2. If I spent the 30 minutes to set up auto rolling treasuries at Fido to manage medium term cash, I'll probably convert my entire account to ETFs and head on out the door from VG entirely.
Last edited by pyld76 on Thu Oct 10, 2019 9:34 am, edited 1 time in total.

TBillT
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Re: Fidelity to $0 Commissions

Post by TBillT » Thu Oct 10, 2019 9:34 am

Ah good...we have bunch of trades coming up...

I am may need tax help this year from someone who knows how to do stock cost basis real well for a whole bunch of small lackluster stocks some of which are hard to calc base value due to mergers spin-offs etc

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Cash
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Re: Fidelity to $0 Commissions

Post by Cash » Thu Oct 10, 2019 9:39 am

NicB wrote:
Thu Oct 10, 2019 9:11 am
I'm curious -- how many Fidelity customers here are planning to switch from Fidelity TSM ETFs/MFs into VTI now?

I was one of those who traded all of my SPTM in my TDA HSA for VTI :D but don't know if I'll do the same in Fidelity...
I’ll probably keep the zero funds in my tax-advantaged accounts but use VT going forward in taxable.

Topic Author
Cash
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Re: Fidelity to $0 Commissions

Post by Cash » Thu Oct 10, 2019 9:41 am

pyld76 wrote:
Thu Oct 10, 2019 9:32 am

1. Principle. If you believe strongly enough in Vanguard being the proximate cause of the cost of investing dropping enough to give them your business as a result, rather than take advantage of that effect elsewhere, then you'll probably stay at VG.
Just use their ETFs elsewhere. I don’t see how they benefit much from hosting accounts.

effigy98
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Re: Fidelity to $0 Commissions

Post by effigy98 » Thu Oct 10, 2019 9:51 am

TMF/UPRO re-balance was commission free today. Woot!

aristotelian
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Re: Fidelity to $0 Commissions

Post by aristotelian » Thu Oct 10, 2019 9:59 am

NicB wrote:
Thu Oct 10, 2019 9:11 am
I'm curious -- how many Fidelity customers here are planning to switch from Fidelity TSM ETFs/MFs into VTI now?

I was one of those who traded all of my SPTM in my TDA HSA for VTI :D but don't know if I'll do the same in Fidelity...
I'm sticking with FZROX in my HSA!

anon_investor
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Re: Fidelity to $0 Commissions

Post by anon_investor » Thu Oct 10, 2019 10:02 am

Haha, how many people switched from Fidelity to get free commissions elsewhere?

grp2c
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Re: Fidelity to $0 Commissions

Post by grp2c » Thu Oct 10, 2019 10:12 am

NicB wrote:
Thu Oct 10, 2019 9:11 am
I'm curious -- how many Fidelity customers here are planning to switch from Fidelity TSM ETFs/MFs into VTI now?
I'm curious about this as well. All my retirement accounts at fidelity hold fidelity index funds and I hold VTI/VV/VOO in my taxable accounts. I probably won't buy VTI/VV/VOO in my retirement accounts so I can continue to easily tax-loss harvest them in my taxable account.

pyld76
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Re: Fidelity to $0 Commissions

Post by pyld76 » Thu Oct 10, 2019 10:26 am

NicB wrote:
Thu Oct 10, 2019 9:11 am
I'm curious -- how many Fidelity customers here are planning to switch from Fidelity TSM ETFs/MFs into VTI now?

I was one of those who traded all of my SPTM in my TDA HSA for VTI :D but don't know if I'll do the same in Fidelity...
When I moved to Fido, in my Roth and HSA I utilize their zero funds--on the theory that if they should lag other Fido/VG/Blackrock's Total Market or Total international offerings in a statistically significant way, the tax cost and general friction to switch is ostensibly zero.

In taxable, I will ETF convert MF shares (and check VG--since their reputation on maintaining cost basis across this kind of thing isn't unblemished if you believe the forum), wait a few days, check the cost basis info on VG's website for sanity, and then send the instruction to Fido to pull it all over. I'll then continue to utilize VG's ETFs in taxable, and probably use blackrock and/or schwab's offerings to TLH.

Topic Author
Cash
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Re: Fidelity to $0 Commissions

Post by Cash » Thu Oct 10, 2019 10:35 am

Here is the press release. Interesting how they emphasize that they do not sell order flow:

https://www.fidelity.com/bin-public/060 ... 101019.pdf

student
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Re: Fidelity to $0 Commissions

Post by student » Thu Oct 10, 2019 10:45 am

Cash wrote:
Thu Oct 10, 2019 10:35 am
Here is the press release. Interesting how they emphasize that they do not sell order flow:

https://www.fidelity.com/bin-public/060 ... 101019.pdf
I wonder how Schwab will respond. For the comparison, the one about zero account fee draws my attention. No more account closing fee. https://www.fidelity.com/why-fidelity/pricing-fees

I guess it is Schwab, your move.

lazyday
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Re: Fidelity to $0 Commissions

Post by lazyday » Thu Oct 10, 2019 11:05 am

Cash wrote:
Thu Oct 10, 2019 10:35 am
Here is the press release. Interesting how they emphasize that they do not sell order flow:

https://www.fidelity.com/bin-public/060 ... 101019.pdf
Nice press release. I think they have a lot to brag about, and get it across well.

Unless I can get a good bonus, I see no reason to willingly pick any broker other than Fidelity or Vanguard.

By the way, I think good execution is about more than just not selling order flow. For example, maybe you can have a mediocre execution if an order is internalized?

MrBobcat
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Re: Fidelity to $0 Commissions

Post by MrBobcat » Thu Oct 10, 2019 11:08 am

UpperNwGuy wrote:
Thu Oct 10, 2019 5:32 am
I guess this means we can quit posting in that other thread that asks when we will be moving our accounts out of Fidelity because of the commissions.
But now we can start a thread about whether we should dump our Ishare etfs and buy Vanguard etfs in our Fido accounts. :D

boglemon
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Re: Fidelity to $0 Commissions

Post by boglemon » Thu Oct 10, 2019 11:13 am

Cash wrote:
Thu Oct 10, 2019 10:35 am
Here is the press release. Interesting how they emphasize that they do not sell order flow:

https://www.fidelity.com/bin-public/060 ... 101019.pdf
Have I read this wrong? According to their most recent 606, they do participate in PFOF:
FBS, through its affiliated broker-dealer NFS, received a credit on average of $0.0030 per share for each order routed by it to NASDAQExecution Services, LLC that added liquidity and which subsequently executed. FBS was charged fees on average of $0.0019 per share foreach order that removed liquidity from NASDAQ Execution Services, LLC.
And so on for equities and options.

mervinj7
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Re: Fidelity to $0 Commissions

Post by mervinj7 » Thu Oct 10, 2019 11:20 am

MrBobcat wrote:
Thu Oct 10, 2019 11:08 am
UpperNwGuy wrote:
Thu Oct 10, 2019 5:32 am
I guess this means we can quit posting in that other thread that asks when we will be moving our accounts out of Fidelity because of the commissions.
But now we can start a thread about whether we should dump our Ishare etfs and buy Vanguard etfs in our Fido accounts. :D
Hmm, is that the new plan now? Do we need a separate thread for ITOT vs VTI? On paper, the indexes look similar and the ERs are both 0.03%. How will I choose now?

:confused

MrBobcat
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Re: Fidelity to $0 Commissions

Post by MrBobcat » Thu Oct 10, 2019 11:25 am

mervinj7 wrote:
Thu Oct 10, 2019 11:20 am
MrBobcat wrote:
Thu Oct 10, 2019 11:08 am
UpperNwGuy wrote:
Thu Oct 10, 2019 5:32 am
I guess this means we can quit posting in that other thread that asks when we will be moving our accounts out of Fidelity because of the commissions.
But now we can start a thread about whether we should dump our Ishare etfs and buy Vanguard etfs in our Fido accounts. :D
Hmm, is that the new plan now? Do we need a separate thread for ITOT vs VTI? On paper, the indexes look similar and the ERs are both 0.03%. How will I choose now?

:confused
I was being facetious, but I still won't be surprised if such a thread occurs. :D

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jpsfranks
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Re: Fidelity to $0 Commissions

Post by jpsfranks » Thu Oct 10, 2019 11:33 am

In light of other firms already making this change, it would have been tough for Fidelity to continue their "Zero" marketing campaign while still charging trading commissions.

anon_investor
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Re: Fidelity to $0 Commissions

Post by anon_investor » Thu Oct 10, 2019 11:55 am

I know Vanguard will likely not go to $0 commissions for stocks. But it would be nice for Vanguard to give non-Flagship customers a couple of free trades a year. I do not buy individual stocks, but over the years my spouse and I have been gifted a few shares of individual stock that we may sell in the near future. I guess we could always transfer those shares to the now many $ commission brokerages to complete the sale... I guess Fidelity is another option now, but I hate to go through the hassle...

MinhN
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Re: Fidelity to $0 Commissions

Post by MinhN » Thu Oct 10, 2019 12:02 pm

This is awesome. I couldn't decide between Schwab or Fidelity but this seals the deal. Fidelity has free ACAT and cheaper options fees.

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indexfundfan
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Re: Fidelity to $0 Commissions

Post by indexfundfan » Thu Oct 10, 2019 12:14 pm

MinhN wrote:
Thu Oct 10, 2019 12:02 pm
This is awesome. I couldn't decide between Schwab or Fidelity but this seals the deal. Fidelity has free ACAT and cheaper options fees.
You could get a bonus at Schwab though ...
My signature has been deleted.

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Ice-9
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Re: Fidelity to $0 Commissions

Post by Ice-9 » Thu Oct 10, 2019 12:19 pm

I always preferred Vanguard and have my Roth there, but my larger workplace accounts are at Fidelity.

Ten years ago, I addressed this by:
* setting up BrokerageLink self-directed brokerage window at Fidelity
* directing bi-weekly contributions to Fidelity (then "Spartan") index funds, which did not have as favorable ER as Vanguard's
* for asset classes where I really preferred Vanguard's offering, once a year I'd take everything over Fidelity's minimum fund balance and send it to the equivalent Vanguard ETF, eating the $7 commission just once per asset class per year

Since then:
* Fidelity offered iShares ETFs commission-free, so I replaced many ETFs with those
* Fidelity started offering some more competitive index funds, so I made these my defaults, of course with no commissions
* Fidelity got rid of the fund minimums, so no need to worry about them anymore
* My only Vanguard ETF holdout as of recent years was VWO Emerging Mkts ETF, and not because I didn't like Fidelity's offering, but rather because I didn't think it was worth even the then $5 commission to switch all my emerging markets into one fund.

Now, I guess I have no excuse. I can consolidate that last ETF into one fund for free. Being cheap and lazy can work in your favor! :beer

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whodidntante
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Re: Fidelity to $0 Commissions

Post by whodidntante » Thu Oct 10, 2019 12:25 pm

CardinalRule wrote:
Thu Oct 10, 2019 8:07 am
Will I no longer get my free TurboTax Premier? :confused :)
Gasp! I might have to purchase it like I'm an aircraft carrier battlegroup class Vanguard customer! :happy

protagonist
Posts: 6021
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Re: Fidelity to $0 Commissions

Post by protagonist » Thu Oct 10, 2019 12:26 pm

pyld76 wrote:
Thu Oct 10, 2019 9:32 am
Well, this will leave me with a money market fund at VG and nothing else.

VG now only has three real advantages:
1. Principle. If you believe strongly enough in Vanguard being the proximate cause of the cost of investing dropping enough to give them your business as a result, rather than take advantage of that effect elsewhere, then you'll probably stay at VG.
I find that a pretty specious rationale. Vermont was the first state to outlaw slavery. Now that it is 2019, would that be a motivating factor for you to live in Vermont rather than the other 49 "free" states ? They can take deserved historical pride in being the pioneers, but that's about it.

2. Money market fund. Fido is still at a 30 or so bps disadvantage, minimum, to VG.
Is that also true of their premium class money market fund, FZDXX? That's where I keep my cash. I just checked and its current 7 day yield is reported as 1.87%.
3. You want to hold mutual funds in taxable rather than ETFs. You get a deal due to the heartbeat trades that VG's share-class structure enables in VG mutual funds in taxable which is basically unobtainable anywhere else.
I can't comment on this, or on how much it would mean financially to the typical investor in index funds (like most Bogleheads). I have no knowledge about it. Maybe others here would care to comment.

Anyway, if Fido lowered their commissions to zero, I can't imagine it will take Vanguard long to follow suit. That's the beauty of competition.
Last edited by protagonist on Thu Oct 10, 2019 12:32 pm, edited 1 time in total.

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