This market’s so great, brokers are shoving clients into trading!
Shares of Charles Schwab (SCHW) are off 50 cents, or 2.6%, at $18.86, after the company this morning said it would chop $3 off its commission for online trades, regardless of customers’ assets with Schwab or number of times the customer trades annually. Trades by phone are now $13.95, down from $17.95 previously for accounts of less than a $1 million, and broker-assisted trades are now $33.95, down from $37.95 for the small fry previously.
In the same breath, Schwab announced new “managed” exchange-traded funds — ETFs — which are currently the rage among fund managers trying to get into the ETF game. (See my recent Q&A with Matt Hougan of Exchange Traded Funds Report.) The ETF portfolios will cover equities but also TIPS (Treasury Inflation-Protected Securities), real estate, and commodities. The funds have minimum investments of $100,000 and will kick off on January 19.
Schwab has basically undercut the $9.99 TD Ameritrade (AMTD) and E*Trade (ETFC) have been charging, and the $10.95 Fidelity Investments charges. Ameritrade shares are down 88 cents, or 4.5%, at $18.68, while E*Trade is up 2 cents, or 1%, at $1.82.
Ameritrade, mind you, is being weighed down today by a note from Collins Stewart lowering earnings estimates for the company. The firm also lowered its expectations for E*Trade, however.
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