Online Brokers Lower Fees on ETFs Benefiting Investors

As John Spence of MarketWatch recently writes, “Online brokers are fighting hard for a greater share of the fast-growing exchange-traded fund business, and investors stand to benefit from lower costs.”

His article ‘Big brokers cut commissions to draw ETF assets, trading — Fidelity, Schwab waive fees as competition heats up; investors reap lower costs’ documents the seimic changes that will encourage investors to wake up and yank Wall Street out of their pockets.

As he points out, “Paying broker commissions to trade ETFs has been a major drawback for buy-and-hold investors who contribute small amounts to their retirement portfolios on a periodic basis. Those fees can quickly negate the cost advantages of ETFs.” Now, for those employing the buy-and-hold investing strategy with an asset allocation that provides for diversification and rebalancing to keep to that allocation, these lower fees are a true win. ‘The 25 iShares ETFs that can be traded commission-free at Fidelity are so-called core funds that can be used as the major building blocks in a diversified portfolio.’