Investors have spoken. Trading fees are a major deciding factor in exchange traded fund investments as Charles Schwab’s ETF OneSource platform reveals just how much commissions matter.
In six months, Schwab discovered that the 107 commission-free ETFs on the brokerage platform attracted 40% of Schwab-custodied ETF flows, compared to 20% before the program was launched, reports Jackie Noblett for Ignites. [Six Popular Commission-Free ETF Trading Platforms]
“The flows we’ve seen into commission-free ETFs validate the hypothesis on which this is founded: that commissions are a barrier to ETF investment,” Beth Flynn, VP of ETF platform management at Schwab, said in the article.
Among registered investment advisor clients, over half of asset flows went into OneSource commission-free ETFs.
“As you look at the RIA structure, it’s a fee-based advisory business, so cost matters and any additional savings are certainly appreciated,” Jonathan Wills, RIA sales director at PowerShares, said in the article.. “As we look at Schwab and the RIA community as a whole, certainly it is one of our biggest opportunities in the ETF space.”
Due to its success, Schwab is laying the groundwork for adding more products to OneSource and new sponsors in 2014.