Fidelity Investments Eliminates Commissions
The broker joins rivals in slashing trading costs to zero
Fidelity Investments announced Thursday that it is eliminating commissions for stock trading. The elimination of commissions will also include exchange-traded funds (ETFs) and options. The firm is the latest in a long line that has cut fees to zero as the discount broker wars continue.
Fidelity Investments will officially cut those costs for its 21.8 customer accounts starting on November 4.
Last week, E*Trade Financial, Charles Schwab, TD Ameritrade, and Tradestation cut online trading commissions. It’s widely expected that the companies will look to make up the revenue by selling advisory services. The firms may also aim to increase order flow sales or expand new lines of business. Market makers like Virtu Financial that purchase order flow make a profit from the spread on the trading of shares.
Fidelity Investments Responds to Rivals
The news comes as discount brokers responded to Fintech startups like Robinhood. The $7.6-billion startup launched several years ago and allowed users to trade for free. However, the company has struggled to launch other financial services like savings and checking accounts. The move by discount brokers has raised concerns about Robinhood’s ability to maintain its stronghold with a Millenial crowd.
Earlier this week, UBS senior equity analyst Brennan Hawken told CNBC this week that Robinhood could start to lose its faithful customer base.
Hawken said the company’s customers are “not going to stay at Robinhood.” He went on to argue that firms like Schwab and TD Ameritrade have “trusted” brands with the same free benefits.
Finally, Robinhood spokesperson Jack Randall said the company is focusing on new products that can reduce costs and barriers in the financial industry.
Latest Alternative Investment News
Proxy advisory firm Institutional Investor Advisory Services India Ltd. (IiAS) has issued a note ahead of PayTM’s (NSE: PAYTM) annual shareholders’ meeting on August 19 calling for the replacement of…
Lockheed Martin (NYSE: LMT) and its venture finance arm Lockheed Martin Ventures plans to boost the latter’s investment outlay from $200 million to $400 million.
PicPay, the well-known Brazilian payment app, has got its shoe in the crypto door in partnership with Paxos, a leading regulated blockchain infrastructure company. Picpay is opening crypto trading services…
BT (LON: BT.A), the telecom major, announced that Barclaycard Payments had joined its partnership network seeking to help the growth of UK microbusinesses. BT customers with 0-5 employees would get…