TD Ameritrade $0 commissions

**kork13** · 10-02-2019, 05:22 AM

As more and more of our daily lives go fully online with minimal human input, I can see stuff like this becoming more and more the norm. These companies have multitudinous other ways to make money off of their customers, so while seemingly significant for you and me, it's probably only a minor hit to a major trading house such as TD. No complaints here!

ETA: By the way.... I saw recently that Charles Schwab is doing roughly the same thing -- free stock trades, etc.

**rennigade** · 10-02-2019, 06:46 AM

I think charles schwab is also doing this now. Seems like the new norm.

**Thrif-t** · 10-02-2019, 01:37 PM

Yep, I heard I believe, on a Clark Howard podcast that they are trying to get market share away from Vanguard.

**greenskeeper** · 10-03-2019, 01:33 PM

I want to punch that TD Ameritrade spokesman in the throat every time I see their commercials.....that is all.

**james.hendrickson** · 10-03-2019, 01:36 PM

TD Ameritrade, Schwab and Fidelity all have cut their trading costs. Its not out of altruism for their clients. The traditional brokerage industry is losing market share to robo-advisors like Wealthfront and smaller start ups like Robinhood. Traditional brokers have to cut trading costs for customers to stay competitive.

**disneysteve** · 10-03-2019, 02:15 PM

Originally posted by james.hendrickson View Post

TD Ameritrade, Schwab and Fidelity all have cut their trading costs. Its not out of altruism for their clients. The traditional brokerage industry is losing market share to robo-advisors like Wealthfront and smaller start ups like Robinhood. Traditional brokers have to cut trading costs for customers to stay competitive.

I definitely think that's part of it. Cheap competition is a powerful driver. And as kork said, it's not like they aren't still charging for a wide variety of other products and services. They're only giving away a very small piece of their business and it probably pays off many times over if it wins them new customers.

**Jluke** · 10-03-2019, 02:31 PM

E*Trade too apparently. Starting Oct 7

**james.hendrickson** · 10-03-2019, 02:33 PM

Originally posted by Jluke View Post

E*Trade too apparently. Starting Oct 7

Yeah, its got to be market pressure. How else do you account for firms voluntarily giving up a revenue stream.

**Nutria** · 10-05-2019, 06:25 AM

How then do they make money? Are MF & ETF fees enough?

**Smallsteps** · 10-05-2019, 07:23 AM

Originally posted by james.hendrickson View Post

Yeah, its got to be market pressure. How else do you account for firms voluntarily giving up a revenue stream.

This is everywhere in so many categories.... too many players competing for the same group / same money and they start to undercut. maybe believing competition can't afford the cut ......or perhaps the real income is on the backside.
I usually question where a company is doing something that looks on surface as an income cut.... sooner or later it has shown up as them recouping that revenue on the backside. It is SO easy to get new people to jump on board then find out later that there is fine print.
Every time i wonder if i missed some great deal.... I remember those times when i said something is not adding up and then found the catch before i stepped into something.

**Jluke** · 10-05-2019, 08:25 AM

Originally posted by Nutria View Post

How then do they make money? Are MF & ETF fees enough?

These firms have managed account type services such as Vanguard PAS (0.3%).

And then you still have the people that can be persuaded to purchase life insurance (not term), annuities and other offerings that the firms use as money makers.

**james.hendrickson** · 10-05-2019, 08:47 AM

Originally posted by Smallsteps View Post

This is everywhere in so many categories.... too many players competing for the same group / same money and they start to undercut. maybe believing competition can't afford the cut ......or perhaps the real income is on the backside.
I usually question where a company is doing something that looks on surface as an income cut.... sooner or later it has shown up as them recouping that revenue on the backside. It is SO easy to get new people to jump on board then find out later that there is fine print.
Every time i wonder if i missed some great deal.... I remember those times when i said something is not adding up and then found the catch before i stepped into something.

So I pulled Charles Schwabs 10-K. Trading fees are one of their main four or five sources of revenue. Here are the kinds of transactions they charge fees on:

Trading revenue includes commissions earned for executing trades for clients in individual equities, options, futures, fixed
income securities, and certain third-party mutual funds and ETFs, as well as principal transaction revenue earned primarily
from actions to support client trading in fixed income securities.

Source: Schwab 10-K ending December 31, 2018, page 4.

So, yes, charging commissions on stocks is a portion of their revenue, but they're still charging for trading commissions on a ton of other types of securities. Bonds, options, 3rd party mutual funds, ETFs. etc.

I would imagine this is a similar situation for most of the major brokerage companies in the US - vanguard, Fidelity, TD Ameritrade, etc.

**Nutria** · 10-05-2019, 03:54 PM

Originally posted by Jluke View Post

These firms have managed account type services such as Vanguard PAS (0.3%).

And then you still have the people that can be persuaded to purchase life insurance (not term), annuities and other offerings that the firms use as money makers.

Are you saying that TD Ameritrade, Fidelity and Schwab sell life insurance?

**disneysteve** · 10-05-2019, 04:10 PM

Originally posted by Nutria View Post

Are you saying that TD Ameritrade, Fidelity and Schwab sell life insurance?

https://www.fidelity.com/life-insura...life-insurance
Fidelity does. I didn't check on the others.

Term and Universal as well as Long Term Care.

TD Ameritrade $0 commissions