TD Ameritrade $0 commissions

[james.hendrickson]

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

Schwab sure does:

https://client.schwab.com/secure/cc/...life_insurance

[~bs]

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.

A lot of those other security commissions seems to be included in the $0. Maybe only 3rd party mutual funds is left. Pretty sure all these sites are copying each other and most commissions are $0

[disneysteve]

Schwab sure does:

https://client.schwab.com/secure/cc/...life_insurance

James, that link doesn't work (you have to be logged in) but this one does: https://www.schwab.com/public/schwab...ment/insurance

They sell a variety of insurance products.

The point is that there is a benefit to these companies to "giving away" certain products to get new customers in the door. Once they have you, they can market various other products and services to you.

[Jluke]

I get a lot of life insurance emails from Fidelity (company 401k) - coincidentally they go to my junk mailbox.

I’ve only had E*Trade for about a year since they took over Capital One investing. We’ll see if I get more emails from them pushing other products (got one recently about free managed investing for 6 months).

[Nutria]

I get a lot of life insurance emails from Fidelity (company 401k)

Interesting. I never got any from them when they managed our 401(k). Voya now manages it, and I don't get any such spam from them either.

[disneysteve]

I got my email from Schwab today.

Starting today Schwab is eliminating online stock, ETF, and base options commissions for trades placed on a U.S. or Canadian exchange.¹

[james.hendrickson]

Wow - thats going to hurt their bottom line.

[disneysteve]

Wow - thats going to hurt their bottom line.

Clearly they and others doing the same don't think so. And if it pulls in new customers, all the better, as we've already said. It gives them more people to market their other services to.

[Thrif-t]

A couple of years ago when Scottrade went out of business and I moved mine and the kids IRA's to Schwab, they gave us 10 years of free trades for doing so. Maybe they have data that says this doesn't hurt their bottom line?

[TheCudder]

As of today, Fidelity has jumped on the $0 trade commission band wagon for stocks & ETFs.

[disneysteve]

Ally is now doing this as well. What a great trend for the consumer.

"we’re always looking for ways to help you reach your financial goals. That’s why we’re excited to announce commission-free trading on all U.S. exchange-listed stock, ETF, and option trades. Plus, we’ve lowered our fee for option trades to just $0.50 per contract."

At this point, if you are still with a company that charges a commission, I think you're doing it wrong as there are numerous free options out there.

[~bs]

Yup, everyone price matching.

[Smallsteps]

i just took a survey/ poll about does this switch to $0 trade make me want to expand or start doing trades? find it funny maybe they should have surveyed before making the switch the focus on questions seemed to lead me to believe they wanted NEW traders.

[disneysteve]

i just took a survey/ poll about does this switch to $0 trade make me want to expand or start doing trades? find it funny maybe they should have surveyed before making the switch the focus on questions seemed to lead me to believe they wanted NEW traders.

I'm sure eliminating commissions is intended to attract new customers, especially traders.