Charles Schwab and TD Ameritrade $0 commissions

[Dicast]

Was checking to see if anyone saw this development. Looks like the race to the bottom has started. Apparently TD took a 25% hit to their own stock from this.

I was wondering how long it would take. I have been using M1 for over a year now and enjoy the free transactions.

[CFEonline]

Yes it looks promising. Hopefully I can simplify things and get economical access to the particular international, small value and REIT funds I like best regardless of which brokerage holds the 401k/403b/457b/Roth IRA/HSA/taxable/etc for me and for my spouse.

 

https://www.cnbc.com/2019/10/01/charles-schwab-is-eliminating-online-commissions-for-trading-in-us-stocks-and-etfs.html

[Peds]

cant wait till they pay me to invest....

[Dicast]

Back when I did individual stocks I was pretty happy with $7 trades at Scottrade. Of course that was in college before I had educated myself to the ways of index funds.

Peds, maybe the government will subsidize our investments to push it past zero?

[burritos]

Peds wrote:

cant wait till they pay me to invest….

Click to expand...

They paid me $1500 when capitalone closed their brokerage and I moved my account over to schwab. And yes, they give you a 1099 for it at the end of the year.

[Zaphod]

Dicast wrote:

Back when I did individual stocks I was pretty happy with $7 trades at Scottrade. Of course that was in college before I had educated myself to the ways of index funds.

Peds, maybe the government will subsidize our investments to push it past zero?

Click to expand...

Dont really have to. They make money off of order flow and the like (robinhood) or if they decided to go after data, etc....they could pay higher on cash balances, give a little stock, etc...it will happen.

[djohnflatfeecfp]

Thought I'd share some comments from advisors about these moves.  There seem to be two common themes.

First, is people will now start trading more frequently because there are no more commissions to slow them down. Not sure about this one as after reading some of Alchemy, logic often loses to emotion.

 

Second, is every advisor should now become an RIA.  Again, I don't know how much this would increase the growth of independent advisors but I guess it could happen.  Most wirehouse advisors I know are not going anywhere because they are tied down by recruitment deals or they have inherited most of their clients from advisors who left their firm.  The latter type of advisor knows the bulk of their inherited clients won't follow them to an RIA world.

 

Back to the first theme - anyone here thinking about increasing the frequency of your trading now that two major custodians have eliminated commissions? ;-)

[Peds]

No because all my trades are free at Vanguard already.

[burritos]

Peds wrote:

No because all my trades are free at Vanguard already.

Click to expand...

I'm rotating between 3 Vanguard ETF's. So that's $4.95 every 2 weeks. I'll get to save $129 in the course of 1 year. That won't even buy one share in any of the three funds, but I'll take it.

[Peds]

Why would you buy Vanguard funds not at Vanguard?

[bean1970]

i'm surprised it took this long. ME is free since they started in 2010. along with 24/7 customer service.

[Craigy]

Yeah I liked my Scottrade account back in the day.  Went to $7.00 trades vs the ~$50.00 trades at merrill lynch.

I think Vanguard charges me something similar for stock trades now.