Following growing discontent over the sudden departure of Vanguard and iShares Core ETFs on TD Ameritrade’s commission-free ETF trading program, the brokerage platform has tripled the amount of time it will allow advisors to continue trading the popular picks for free.
“We heard from advisers that 30 days was not enough time, and we are extending that to 90 days, to Jan. 19, 2018,” Tom Nally, president of TD Ameritrade Institutional, said.
TD’s original announcement, which included news that the platform would nearly triple the number of commission-free ETFs to 296, revealed Vanguard and iShares Core ETFs would no longer be available on its no-transaction-fee platform, but the action drew wide dissatisfaction among financial advisors, reports Jeff Benjamin for InvestmentNews.
For example, Michael Kitces, partner and director of research at Pinnacle Advisory Group and co-founder of the XY Planning Network, has vehemently censured TD’s latest changes, arguing that it would be particularly hard on young investors whom are making regular small allocations to growth their nest egg.
In an online exchange, he challenged the “TDA public line that ‘advisers are happy with these changes.'”
“The news is that there is actually a real negative backlash against TDA on this, especially from next-generation advisers and firms serving next-generation clients that they’ve been claiming to support,” Kitces said.
Nally, on the other hand, disagreed with the assessment that all feedback has been negative, but he did acknowledge some feedback that led to the decision to extend the trading period for Vanguard and iShares ETFs for free by 90 days.
“We’ve been listening to advisers throughout last week,” Nally told InvestmentNews. “Michael is just one voice. We like feedback on both sides.”
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The changes also come with some benefits, Nally argued. For example, the additional State street SPDR ETFs that have been added to the no-transaction-fee platform will be a net benefit to help cut down on investment costs.
“These are the lowest-cost broad-index-tracking ETFs,” Nally said. “The domestic funds are 18% cheaper than Vanguard’s and on the international front, they are 33% cheaper than Vanguard, which we think will be attractive to advisers and their clients.”
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