Pershing LLC, the clearing firm, prime broker and provider of solutions to registered investment advisors that is a unit of Bank of New York Mellon (NYSE: BK), could be the next big name to provide clients with access to select exchange traded funds on a commission-free basis.
“A top Pershing executive said Wednesday the firm is considering a commission-free trading platform for exchange-traded funds,” reports Trevor Hunnicutt for InvestmentNews.
News of Pershing’s potential foray into commission-free ETFs comes a week after it was reported that Raymond James is considering a similar move for RIAs that custody client assets with the firm. Raymond James is expected to unveil its commission-free ETF lineup in the coming days with a combined 120 funds from First Trust, AdvisorShares, ALPS Advisors and Greenhaven. First Trust is the sixth-largest U.S. issuer of ETFs while Maryland-based AdvisorShares is one of the largest issuers of actively managed ETFs. [Raymond James Tries its Hand at Commission-Free ETFs]
“Pershing offers clearing services to 811 broker-dealers and holds assets in custody for 562 mostly high-end RIA clients,” according to InvestmentNews.
If it moves forward with a commission-free ETF platform, Pershing’s offering, like Raymond James’, would be geared toward professional whereas other commission-free platforms have struck gold by being available to both advisors and retail investors.
Earlier this month, California-based Schwab said ETF assets custodied at the firm reached $216 billion at the end of the third quarter, a 20% year-over-year increase. “Retail traders captured 12% of the 12-month ETF flows, up from just 6% in the prior year,” according to Schwab. At the end of the third quarter, there were $19.4 billion in assets on the OneSource platform. [Schwab Continues Torrid Pace of ETF Asset-Gathering]
Schwab’s ETF OneSource is the largest commission-free ETF platform with 182 funds from 13 issuers. OneSource is available to RIAs that custody with Schwab and the company’s retail clients.
Fidelity offers nearly 75 ETFs, its own and some iShares products, to its advisors and retail clients on a commission-free basis.
TD Ameritrade features iShares and Vanguard ETFs, among others, among its just over 100 commission-free offerings. The firm makes those ETFs available to advisors and retail clients.
ETF Trends editorial team contribute to this post.