Fundsters, the commissions investors pay on your funds through Fidelity's
are about to get a whole lot cheaper ... unless you're CGM
], Dodge & Cox
], Ruane Cunniff & Goldfarb's Sequoia
] or Vanguard
Lisa Shidler of RIABiz reports
that on January 1 the Boston Behemoth is lowering commissions on buy and sell trades of funds through both the institutional FundsNetwork platform used by RIAs and the retail one. The price will drop 25 percent to $30 each way (or $60 roundtrip) from $40 each way.
Yet advisors and investors using CGM, DFA, Dodge & Cox, Sequoia or Vanguard funds won't feel the love. While sell trades for these funds will still drop to $30, but buy trades will rise 25 percent to $50. By comparison, Schwab charges $49.95 for buys and sells on funds, while TD charges $24 or $31 per mutual fund trade.
Fidelity spokeswoman Erica Birke, according to the trade publication, described the discrepancy as "a reasonable leveling of the playing field," as none of the five shops pays Fidelity traditional shareholder fees. And none of them charge 12b-1 fees, the revenue sharing from which usually sends 40 basis points to no-transaction fee platform providers like Fidelity.
"The reason we're adding this charge is to address some disparity among the funds on the FundsNetwork platform," Birke told RIABiz
. "Unlike 99% of the fund families on the platforms, these firms noted are not compensating Fidelity for administrative and shareholder services that Fidelity performs on their behalf. These services include but are not limited to, processing trades, dividends, answering questions, delivering required documents, supporting client inquiries and problem resolution, web and trading infrastructures, compliance and reporting to the fund."
newsletter editor Jim Lowell
told the trade pub that the move is the latest piece of a larger fight between Fido and Vanguard, who "still can't seem to figure out a way to play nice in our multi-trillion dollar sandbox."
CEO Alex Potts
(a DFA TAMP), Mariner Wealth Advisors
CEO Marty Bicknell
, industry consultant Burt Greenwald
, and spokespeople for Pershing
, TD Ameritrade
and Vanguard all weighed in for the story.
Neil Anderson, Managing Editor
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