Fidelity Is the Latest to Join Shift to Zero Commissions | ETF Trends

Playing catch up in an increasingly competitive landscape, Fidelity Investments cut trading commissions on its online brokerage to match the aggressive moves made by a number of rivals last week.

Fidelity stopped charging individual investors commissions on online trades of U.S. stocks, ETFs and options on its brokerage platform, the Wall Street Journal reports. Investment advisors will find their commission costs fall to zero on November 4 as well. The brokerage previously charged $4.95 for all online stock trades.

In the digital age where access to many services is just a click away, investors have witnessed costs on many investments drop over the years. Online platforms like Fidelity and Charles Schwab, which also eliminated trading commissions, have been enticing consumers with cheaper products and services, with the price war culminating in zero fees.

Fidelity Playing Catch Up

Schwab last week removed commissions to trade stocks, ETFs and options online. In response, TD Ameritrade and E*Trade Financial followed suit. Fidelity is only now playing catch up.

“We prioritized where we could provide the most value to investors,” Kathleen Murphy, president of Fidelity’s personal investing business, told the WSJ “It’s much more important to have industry-leading practices on cash and trade execution.”

Fidelity argued that it trades stocks more efficiently than its peers to save money for clients, a major selling point for its services. The company also recently unveiled plans to put clients’ cash in a higher-yielding money-market fund, which also let the company stand out from competitors who paid out ultra-low rates on cash.

Fidelity also previously offered 500 commission-free ETFs through its online platform, including several hundred from BlackRock’s iShares.

“We continue to have a great relationship with BlackRock as well as the other ETF sponsors currently participating in our commission-free ETF platform,” a Fidelity spokeswoman said.

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