Raymond James, the Florida-based brokerage firm, will reportedly its own menu of commission-free exchange traded funds for registered investment advisors (RIAs) and their clients.
Raymond James’ RIA unit includes about 110 RIA firms and more than $10 billion in assets, reports Ashley Lau for Reuters. The company could begin offering 120 ETFs on a commission-free basis as soon as Nov. 1, according to Reuters.
It is expected that Raymond James’ initial foray into commission-free ETFs will feature 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.
The Raymond James commission-free ETF effort could be seen as a response to similar programs from Charles Schwab (NYSE: SCHW), TD Ameritrade (NasdaqGS: AMTD) and Fideltiy, which have proven successful. However, there are also important differences.
For example, the Fidelity, TD Ameritrade and Schwab ETF OneSource do not limit commission-free offerings to advisors. Rather, those platforms are also open to retail investors and as data from Schwab indicate, that has proven to be a shrewd move.
On Monday, 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]
Additionally, there are significant differences between the Raymond James commission-free lineup and those of the firm’s aforementioned rivals. Offering 120 commission-free ETFs gives Raymond James a larger commission-free ETF lineup than either Fidelity or TD Ameritrade, but Raymond James’ commission-free lineup lacks the brand cache that its rivals have.
For example, the nearly 75 Fidelity offers without commissions are either its own ETFs or 70 from iShares while TD Ameritrade features iShares and Vanguard ETFs, among others, among its just over 100 commission-free offerings.
With its recent expansion, Schwab OneSource cemented its status as the largest commission-free ETF platform in terms of number of issuers and funds.
Last month, Schwab unveiled a massive expansion of its Schwab ETF OneSource commission-free ETF platform by adding 65 new ETFs and seven new issuers.
New providers joining OneSource are ALPS, Direxion Investments, Global X Funds, IndexIQ, PIMCO, ProShares and WisdomTree (NasdaqGS: WETF). Those firms join OneSource’s original members State Street (NYSE: STT), Guggenheim, Invesco’s (NYSE: IVZ) PowerShares, ETF Securities, U.S. Commodity Funds and Schwab’s own lineup of ETFs. [Schwab Bolsters Commission-Free ETF Lineup]