Displaying items by tag: TDA
Schwab and TDA Cut All Trading Fees
(New York)
Charles Schwab may have just changed market access forever. The giant custodian and broker-dealer just announced that it was eliminating all trading commission on stocks, ETFs, and options. It is unclear if it is doing the same for advisors on its platform, but it said it would extend the offer to clients of RIAs who trade on its platforms. TD Ameritrade immediately matched Schwab’s offer within just a few hours. Following the announcements, brokerage stocks plunged. TDA fell about 26% and E*Trade fell 16% to new 52-week lows. Estimates are that the change in fees will depress both TDA and E*Trade’s earnings by 22%.
FINSUM: This is a game-changing move. Hopefully they will extend this to all trades for advisors. This is a brutally competitive landscape and retail investors and advisors are seeing the benefits.
Big Custodial Savings for RIAs
(New York)
There is a new digital custodian in the industry who is promising 90% cost savings to RIAs on their technology and custodial costs. That new company is called Altruist, and is a commission-free custody service that intends to compete with the big players in the space at their own game. “Our goal is for everyone to really pay almost nothing”, says founder Jason Wenk, continuing “How much has really changed over the last 10 years? The change is way overdue. It’s not like this is some epiphany for us”. The new Altruist platform will launch in October and be very easy to integrate with the existing platforms from major competitors.
FINSUM: Technology costs are eating up a huge chunk of revenue across the industry, so anyone that can lower them and still provide stellar service will have a competitive edge.