TD Ameritrade (NasdaqGS: AMTD), one of the largest online brokerage firms, is considering charging issuers of exchange traded funds to be part of the firm’s expansive commission-free ETF platform.
With the exchange traded funds industry continue to boom, various brokerage houses are racing to get in on the action.
A popular tactic for capturing ETF assets from registered investment advisors, financial planners and retail investors has been to offer menus of ETFs on a commission-free basis. Not only have brokers such as Charles Schwab (SCHW), Fidelity and TD Ameritrade (AMTD) offered select ETFs to clients sans commissions, the firms have routinely boosted the number of ETFs clients can access without commissions.
“TD Ameritrade Inc. is weighing major changes to its commission-free ETF platform, including the possibility of levying fees on asset managers, an executive for the investment platform said Friday,” reports Trevor Hunnicutt for InvestmentNews.
Matthew Judge, director of wealth management solutions for TD Ameritrade Institutional, made the comments to InvestmentNews at the ETF Trends ETF Boot Camp in New York last week.
TD Ameritrade offers over 100 ETFs to advisors and retail clients on a commission-free basis. Popular ETFs on the TD Ameritrade commission-free platform include the Vanguard Dividend Appreciation ETF (NYSEArca: VIG), Vanguard High Dividend Yield ETF (NYSEArca: VYM), Vanguard REIT ETF (NYSEArca: VNQ) and the WisdomTree India Earnings Fund (NYSEArca: EPI).
“Judge said TD Ameritrade is reconsidering the structure of its commission-free program despite its current success and the firm’s strong relationships with corporate partners, including Morningstar, and most of the largest managers of exchange-traded funds. He said the firm has made no final decisions about whether it will make any changes to the program,” according to InvestmentNews.
Schwab ETF OneSource is the largest commission-free ETF trading platform with over 200 ETFs available to advisors and investors.
Earlier this year, Schwab added nine new ETFs to OneSouce and one new issuer, J.P. Morgan Asset Management, the ETF arm of J.P. Morgan Chase (NYSE: JPM). As of May 31, 2015, Schwab ETF OneSource has $45 billion in assets under management and year-to-date flows into ETFs in the program are $5.8 billion, representing 37% percent of the total ETF flows at Schwab.